South African Rand Trades Soft on U.S. Dollar Rally
The South African rand traded weaker on Friday as investors continued to favour the US dollar amid escalating tensions in the Middle East and persistent concerns around global inflation.
Fresh US strikes against Iranian targets, Iran’s retaliatory action, and ongoing disruptions to shipping through the Strait of Hormuz supported safe-haven demand for the dollar, First National Bank (FNB) said in a brief.
Market analysts said higher oil prices reinforced concerns that inflation may remain elevated, supporting expectations that interest rates could stay higher for longer.
The rand is changing hands at R16.29 to the US dollar, R18.65 to the euro and R21.89 to the British pound, the Bank said amidst uncertainties in the global commodity market.
The yellow metal traded relatively flat as investors balanced safe-haven demand against concerns that rising oil prices could contribute to inflationary pressures.
FNB said that while ongoing tensions between the US and Iran continued to support demand for defensive assets, expectations that interest rates may remain elevated and a firmer US dollar limited gains in the gold price.
Gold is trading at $1,117 per ounce, while oil prices remain elevated as markets continue to assess the impact of escalating tensions in the Middle East on global energy supplies.
Shipping activity through the Strait of Hormuz has slowed significantly following renewed attacks and military action in the region, increasing concerns that disruptions could delay the recovery in Middle Eastern oil exports.
These supply risks continued to provide support for crude oil prices. Brent crude oil is trading at ~$76.71/barrel. #South African Rand Trades Soft on US Dollar Rally. #South African Rand Trades Soft on U.S. Dollar Rally#
