JOHANNESBURG, April 9 (Reuters) - The South African rand was weaker on Thursday on doubts over a fragile two-week ceasefire between the U.S. and Iran, while traders also assessed domestic economic releases for clues on the health of Africa's largest economy.
* The viability of the ceasefire was in question as Israelcontinued to attack Lebanon on Thursday. * At 1255 GMT, the rand traded at 16.45 against the dollar,down 0.4% from its previous close. * Investors exercised caution as energy-dependent economiesstand exposed to oil price volatility, which threatens to stokeinflation and strain economic growth. * South African assets rallied after the news of theceasefire, with the local currency gaining almost 3% onWednesday and paring some of the losses amassed since the startof the Iran war. * "Following the initial appreciation, the rand appears tohave settled into a range as investors await clarity on theceasefire agreement, which remains fraught with challenges anddistrust," said ETM Analytics in a note. * "This weekend's events will be a critical test of whetherthe ceasefire holds, as officials meet in Pakistan to beginnegotiations," said the firm, adding that the rand is expectedto remain range-bound into next week, due to "light positioningand lower volatility". * South Africa's net foreign reserves fell to $73.19 billionat the end of March from $75.84 billion in February, centralbank data showed on Thursday. * The country's manufacturing output fell 2.8% year-on-yearin February, after declining by a revised 0.1% year-on-year inJanuary. * On the Johannesburg Stock Exchange, the Top-40 index wasdown 0.8% * South Africa's benchmark 2035 government bond was weaker,as the yield rose 7 basis points to 8.545%.(Reporting by Sfundo Parakozov and Nilutpal Timsina; Editing by Jan HarveyEditing by Keith Weir)
