South African Rand Trades Sideways as Gold, Oil Rally
The South African Rand (ZAR) traded sideways on Wednesday against the crosses, including the US dollar, the Euro and the British pound.
The local unit was stable as traders continue to assess the ongoing uncertainty surrounding the Strait of Hormuz, which continues to pose a risk to global markets.
However, the lack of significant weakness in emerging-market currencies suggests investors are not yet pricing in a broader risk-off environment.
The rand traded at R16.19/dollar, R18.68/euro and R21.87/pound, according to a brief released by First National Bank (FNB) stockbroking and portfolio management subsidiary.
At $4,400 per ounce, Gold prices are higher on Wednesday, holding near two-month highs as investors balance geopolitical uncertainty.
Softer US inflation print eases Federal Reserve’s hawkish expectations.
Additionally, continued central bank gold purchases, particularly from China, have also provided underlying support for the bullion.
Oil prices also firmed up with Brent crude remaining supported by uncertainty surrounding negotiations between the US and Iran and the reopening of the Strait of Hormuz.
Although reports have pointed to ongoing diplomatic discussions, conflicting signals from both sides and continued disruptions to regional shipping routes have kept a geopolitical risk premium embedded in crude prices.
Brent crude, however, was at $89.49 per barrel while US WTI was around $84, reflecting heightened global energy costs.
South Africa’s manufacturing sector remained under pressure in June, with output declining 1.7% year-on-year (y/y), following a 4.4% contraction in May.
While the result was better than market expectations of a 3.7% decline, it nevertheless points to continued weakness in domestic industrial activity.
Encouragingly, seasonally adjusted manufacturing output increased 0.9% month-on-month (m/m), marking a second consecutive monthly gain and suggesting that operating conditions may be stabilising after a difficult start to the year. South African Rand Firmer Against USD, EUR, GBP as Oil Falls

