JOHANNESBURG, March 24 (Reuters) - The South African rand weakened on Tuesday as a firm U.S. dollar outweighed data showing an expansion in economic activity signalled by the central bank's leading business cycle indicator.
* At 1309 GMT, the rand traded at 17.1125 to the dollar,down about 1.8%. * The currency had trimmed some recent losses on Mondayafter U.S. President Donald Trump stepped back from plans totarget Iran's energy infrastructure, lifting appetite forrisk-sensitive currencies like the rand. * But sentiment turned cautious again after Iran deniedholding negotiations with Washington, reviving fears of anenergy-driven economic shock. * South Africa's composite leading business cycle indicatorrose 0.4% month-on-month in January, central bank data showed onTuesday. * The index tracks vehicle sales, business confidence, moneysupply and other data. * "While Q1.26 is expected to see some growth momentum,Q2.26 looks to begin with hefty fuel price increases which willhave a depressing effect on retail, wholesale and vehicle salesif the war persists," said Annabel Bishop, chief economist atInvestec. * Investors now turn to Thursday's central bank ratedecision, when economists polled by Reuters expect the bank tokeep its main lending rate steady at 6.75%. * The U.S. dollar was last up 0.2% against a basket ofcurrencies, with oil prices rising due to supply fears. * Johannesburg's Top-40 index was last down 0.3%. * The benchmark 2035 government bond weakened, with theyield up 12.5 basis points to 9.01%.(Reporting by Sfundo Parakozov and Anathi Madubela; Editing by Mrigank Dhaniwala and Ros Russell)
