South African Rand Steadies Amid Weaker Q2 GDP Data
The South African rand traded sideways as the country’s economic data showed a contrasting picture amid a worsening global energy crisis.
The local unit hovered around R15.99 per dollar, R18.60 per euro and R21.67 against the British pound on Wednesday, as weaker-than-expected Q2 Gross Domestic Product (GDP) data and ongoing Middle East tensions weighed on sentiment.
Rising yellow metal prices and a weaker US dollar shielded the rand from significant sell-offs.
Gold has climbed marginally to $4 355/ounce, as surging oil prices fuelled inflation concerns and strengthened expectations of further US interest rate hikes.
Reflecting the concern over global supply risk, Brent crude oil prices have surged, hovering just under the $100 per barrel mark at $99.31.
This six-week high is driven by severe supply concerns following intensifying military strikes between the US and Iran near the vital Strait of Hormuz chokepoint.
Attacks on vessels, energy infrastructure, and shipping routes in the Gulf, alongside stronger Chinese demand, boosted global crude prices and increased demand for alternative oil supplies.
With economic growth contracting and elevated oil prices fuelling inflation risks, the SARB faces a challenging balance between supporting growth and maintaining its commitment to achieving its 3% inflation target, First National Bank (FNB) said in a brief.
The domestic economy contracted by 0.2% quarter-on-quarter in Q2 2026, reversing a revised 0.4% expansion recorded in the first quarter and ending six consecutive quarters of GDP growth.
The outcome was weaker than both market expectations and FNB economists’ forecast, while annual growth slowed to 0.9% year-on-year (y/y) from 1.9% y/y previously.
The slowdown was driven mainly by weakness in mining, manufacturing, and trade, catering and accommodation, reflecting higher fuel costs and softer demand.
The weak quarter appears to reflect a combination of temporary and structural factors. The escalation of the Middle East conflict drove a sharp increase in fuel prices during the quarter. #South African Rand Steadies Amid Weaker Q2 GDP Data# South African Rand Firmer Against Dollar on Strong Gold Prices
