President Donald Trump delivers a statement on the Iran nuclear deal from the Diplomatic Reception Room of the White House, Tuesday, May 8, 2018, in Washington. (AP Photo/Evan Vucci)
JOHANNESBURG - South Africa’s rand slumped to its weakest in three sessions on Wednesday and looked vulnerable to further falls after U.S. President Donald Trump’s decision to pull out of an international nuclear deal with Iran hit global risk sentiment.

By 08:40am the rand was 0.82% weaker at 12.6700 per dollar. It had held steady near the 12.50 mark for most of the previous session before being floored by a combination of safe-haven buying and light liquidity late on.

Trump on Tuesday pulled the United States out of an international nuclear deal with Iran, raising the risk of conflict in the Middle East, upsetting European allies and casting uncertainty over global oil supplies.

“This (decision) led to a U.S. dollar rally and resulted in U.S. Treasuries moving higher. This should affect emerging markets adversely as a global risk-off sentiment takes hold,” said analyst at Rand Merchant Bank Michelle Wohlberg.

Bonds were also weaker, with the yield on the benchmark 2026 issue rising 8 basis points to 8.47 percent, its highest since the second week of February.

 Stocks were set to open slightly firmer at 9am, with the Top-40 futures index up 0.1%. 

- REUTERS