South African Rand Weakens as Oil Prices Rise, Gold Drops
The rand has weakened slightly against major currencies this morning, trading at R16.38 per dollar, R19.25 per euro, and R22.11 per pound, amid a slide in gold prices.
In a note, First National Bank (FNB) said a depreciation comes as oil prices jumped after the US Navy seized an Iranian ship over the weekend. The US President Donald Trump said an Iranian vessel was seized in an attempt to breach the naval blockade.
In response, Tehran reimposed restrictions on the Strait of Hormuz after claiming that the US blockade violated the ceasefire agreement, which expires on Tuesday.
Most major emerging-Asian currencies are also down versus the dollar, FNB said in its market update on Monday. Gold has declined more than 1% to $4 788.83 an ounce, erasing last week’s gains as escalating tensions in the Strait of Hormuz pushed oil prices higher and stoked inflation fears.
Rising energy costs and expectations of further interest rate hikes weighed on bullion, which is now nearly 10% lower since the conflict began.
Brent crude jumped over 5% to around $95.28 a barrel as renewed Middle East tensions reversed earlier losses. Prices rose after the United States seized an Iranian-linked vessel and Iran reasserted control over the Strait of Hormuz, reviving supply disruption fears.
The setbacks undermined recent peace momentum, worsening inflation risks and raising concerns about a global economic slowdown. CBN to Auction Nigerian Treasury Bills Totalling N750bn
