South African Rand Softens Versus Crosses, Trades at 4-Week Low
The South African Rand (ZAR) trades softer on Wednesday as global investors remain bearish on emerging market currencies amid a shift toward safe-haven assets.
Oil prices remain elevated, though moderating on improved supply conditions, with the market anticipating the US Federal Reserve’s hawkish stance to soften after a weaker US jobs report.
The local unit is softer on Wednesday, according to a brief released by South African First National Bank (FNB), and is trading at R16.58 against the US dollar as the rand remains under pressure.
The local currency posted its fourth straight week of losses amid a stronger greenback, higher global crude prices, and record domestic fuel hikes, the Bank said in its brief today.
Against other crosses, the rand is trading at R21.94 per British pound and R18.61 per euro.
The latest update showed Brent crude climbing to $101.41 a barrel as ongoing threats to Middle East energy infrastructure and tanker traffic through the Strait of Hormuz outweigh improving regional supply flows.
Traders said that while Gulf exports continue to recover and US crude inventories declined last week, geopolitical tensions are keeping crude prices supported despite remaining lower for the week overall.
The bullion is trading at $4 143 per ounce as higher oil prices, elevated Treasury yields and persistent inflation concerns reduced demand for the safe-haven metal.
FNB said in its brief that while markets still expect the Fed to leave rates unchanged this month, investors now look ahead to the upcoming Fed meeting minutes for policy guidance.
On the macro front, the South African Reserve Bank’s biannual Monetary Policy Review warned that inflation risks remain tilted to the upside and reiterated its commitment to anchoring inflation at the 3% target as soon as possible, keeping further policy tightening in focus. #South African Rand Softens Versus Crosses, Trades at 4-Week Low# South African Rand Weakens, Demand Keeps US Dollar Firmer
