Rand Relapses Against USD, EUR, GBP as Optimism Fades
The South African rand or ZAR has weakened against major currencies, trading at R16.56 per U.S. dollar (USD), R19.29 per euro (EUR), and R22.11 per British pound (GBP), First National Bank said in a note on Friday.
With a nudge to the US dollar index, the greenback was firmer against a basket of currencies and was set for its biggest weekly gain in the last 60 days.
Rand came under pressure despite earlier strength on Thursday’s trade, amid optimism surrounding the Trump-Xi summit and a rebound in gold prices.
However, the rand gave up gains as geopolitical tensions related to the Iran conflict continued to fuel inflation concerns, as the dollar extended gains globally, and United States (US) retail sales data supported the greenback.
The country’s main export earnings source, Gold, slipped to around $4 611 an ounce, heading for a 2% weekly loss as strong US inflation data raised expectations of prolonged or higher interest rates.
Rising prices, driven by Middle East tensions and disrupted energy trade, have eliminated prospects of Fed cuts. Meanwhile, US-China talks addressed supply risks, and India tightened gold import rules.
Brent crude rose to around $106.98 per barrel, heading for a weekly gain of over 5% as stalled US-Iran talks have kept the Strait of Hormuz effectively closed.
Supply disruptions and a dual blockade have tightened markets, with the International Energy Agency warning of prolonged undersupply. Meanwhile, US President Trump stated that China is seeking US oil amid escalating shipping risks and ongoing geopolitical tensions. IFC to Explore Livestock, Energy, Housing Investment in Nigeria
