South African Rand Firmer Against USD, EUR, GBP as Oil Falls
The rand is firmer against crosses, including the dollar (USD), the Euro (EUR) , and the British pound (GBP), on Wednesday as lower oil prices continue to support emerging-market currencies and ease inflation concerns.
Declining oil prices signal that the global energy crisis and associated inflation concerns would reduce the hawkish pose from central bankers.
Stockbroking and Portfolio Management of First National Bank (FNB) said in a note that the rand is trading at approximately R16.34 per dollar, R18.86 per euro and R21.99 per pound.
With Brent trading below $80 per barrel, traders confirmed that global oil prices remain under pressure this morning after declining sharply over the past two sessions.
Markets are increasingly pricing in progress towards a diplomatic resolution between the US and Iran and the potential reopening of the Strait of Hormuz, reducing concerns around global supply disruptions.
Additional pressure came from reports of rising US crude oil inventories and weaker-than-expected Chinese services sector data, which raised concerns about future demand growth.
At $4139 per ounce on Wednesday, gold prices are higher as falling oil prices have eased inflation concerns and strengthened expectations of a less restrictive monetary policy environment over time.
Investors are also taking comfort from softer economic data, while continuing to monitor developments in the Middle East and upcoming US labour market data for further clues on the Federal Reserve’s policy outlook. Investors Lose N599bn as NGX Tanks over Banking Stocks Selloffs
