South African Rand Momentum Slows Ahead of Economic Data
Riding against the US dollar weakness, the South African rand (ZAR) momentum in the forex market eased on Tuesday ahead of key economic data set to be released on Tuesday.
The rand has made significant gains since last week and is relatively stable, supported by resilient global risk sentiment and a lack of fresh catalysts affecting emerging-market currencies.
The local currency gained against the greenback, which came under pressure following a weak US jobs report that tempered expectations of near-term Federal Reserve rate hikes.
The rand momentum also benefited from higher precious metals prices. On Tuesday, the rand is trading at around R16.19 to the dollar, R18.69 to the euro and R21.87 to the pound, the stockbroking and portfolio management subsidiary of First National Bank (FNB) said in a brief.
With uncertainties about US-Iran negotiations, Brent crude price is trading around $87.50 per barrel. Crude prices remain supported by ongoing uncertainty surrounding a potential US-Iran agreement and the reopening of the Strait of Hormuz, as well as continued concerns over disruptions to regional energy supplies.
However, after strong gains earlier in the week, the relatively modest move in oil prices this morning suggests that markets are awaiting further developments before taking a clearer directional view.
At $4413 per ounce, gold prices are higher, rising to a 10-week high as strong investor demand continues to support the bullion.
Analysts said the recent gains have been driven by momentum buying, renewed safe-haven demand and ongoing purchases by China’s central bank, with investors also positioning themselves ahead of key US inflation data due later this week.
Notably, gold has continued to rally despite firmer US bond yields, a relatively steady US dollar and higher energy prices, highlighting the strength of demand for the precious metal.
South Africa’s unemployment rate for the second quarter is due for release on Tuesday, followed by manufacturing production data. Oil Prices Slide Below $80 as Markets Price in US-Iran Talks
