JOHANNESBURG, May 11 (Reuters) - South Africa's rand weakened on Monday as higher oil prices, driven by stalled U.S.-Iran negotiations, raised concerns that inflationary pressures may keep interest rates higher for longer.
o At 0640 GMT, the rand traded at 16.4626 against the dollar, about 0.6% down from its previous close.
o "The ZAR has lost a tiny bit of ground today, with Trump's latest not moving it that much, but I would still expect a test higher, with a higher oil price," Adam Phillips, treasury specialist at Umkhulu Treasury, wrote in a research note.
o U.S. President Donald Trump on Sunday rejected Iran's response to a U.S. proposal for peace talks, dashing hopes for an imminent end to the 10-week-old conflict that has caused widespread damage in Iran and Lebanon, paralysed maritime traffic in the Strait of Hormuz, and driven up global energy prices.
o Oil prices surged above $100 a barrel on Monday as the strait remained largely closed, tightening global energy supplies.
o The U.S. dollar strengthened against a basket of currencies as investors sought refuge in safer assets.
o This week South Africa-focused investors will assess unemployment figures, manufacturing production data and mining output, which will shed light on the health of Africa's most industrialised economy.
o South Africa's benchmark 2035 government bond was also weaker in early deals, as the yield rose 6.5 basis points to 8.695%.
(Reporting by Anathi Madubela; Editing by Joe Bavier)
