South African Rand Surges as US Dollar, Oil Prices Slip
The South African rand gained momentum in the forex market, trading stronger against major crosses amid a weaker US dollar and falling oil prices in global commodity markets.
The rand is changing hands at R16.39 to the dollar, R18.66 to the euro and R21.75 to the British pound, according to a brief released by First National Bank (FNB).
The rand traded rangebound in yesterday’s session and has maintained its momentum this morning as investors assess comments from South African Reserve Bank (SARB) Governor Lesetja Kganyago.
SARB chief signalled that further interest rate hikes may be required to keep inflation expectations anchored, even as oil prices have begun to curl back toward pre-war levels.
Brent crude oil is trading at $70.91 per barrel on Thursday, while US WTI is hovering around $67 as negotiations between the US and Iran continue to progress.
Oil prices are weaker this morning as concerns over severe disruptions to Middle East energy supplies continued to ease, reducing fears of prolonged supply shortages and supporting expectations that crude flows through key shipping routes will remain uninterrupted.
Gold prices increased as the US dollar weakened. Gold printed at about $4 064 per ounce, breaking through the $3,900 level in recent weeks.
The yellow metal strengthened yesterday alongside gains in the broader precious metals complex as investors increased their exposure to safe-haven assets amid lingering geopolitical uncertainty, while markets also digested recent US labour market data.
The U.S. dollar was down 0.2% against a basket of currencies, while oil prices dropped about 1% on Thursday, after Qatar said Iran and the U.S. had made progress in indirect talks focused on the Strait of Hormuz, which handles one-fifth of global oil supply before the war.
