JOHANNESBURG, June 12 (Reuters) - The South African rand weakened on Friday as investors monitored prospects for a potential deal to end the Iran war and turned their attention to next week's domestic inflation data.
o At 1446 GMT, the rand traded at 16.34 against the U.S. dollar, about 0.4% down from its previous close.
o In a post on social media, U.S. President Donald Trump denied an Iranian report on the terms of the two sides' potential peace deal.
o Like other risk-sensitive currencies, the rand is heavily influenced by global market sentiment, particularly since the start of the Iran war in late February.
o Investors will look to May inflation and retail sales data due next week for clues on the health of Africa's biggest economy.
o "The Middle East war is expected to wind down this quarter and see drops in fuel prices leading to lower inflation, although there are upside risks," said Investec chief economist Annabel Bishop.
o On the Johannesburg Stock Exchange, the Top-40 index was last up 1.9%.
o South Africa's benchmark 2035 government bond was stronger, with the yield down 7.5 basis points to 8.53%.
(Reporting by Nilutpal Timsina and Anathi Madubela; Editing by Jan Harvey and Mark Potter)
