Rand Slides Against U.S Dollar, Euro as Gold Rally Retreats

Rand Slides Against U.S Dollar, Euro as Gold Rally Retreats

South African rand (ZAR) trades soft against the US dollar, Euro, and British pound on Friday as the gold rally eases amid US-Iran peace deal negotiations.

For what it’s worth, a slew of analysts agreed that tensions in the Middle East have eased as the warring parties continue front-and-back negotiations, which will define the geoeconomic outlook for the rest of the second half of the year.

In its Friday morning brief, First National Bank (FNB) said the rand is trading marginally weaker at R16.44 against the dollar, R19.10 against the euro, and R22.08 against the pound.

The local unit strengthened against the dollar on Thursday as traders sought clues about the South African Reserve Bank’s interest rate outlook following the April inflation print.

Headline inflation surged to 4% in April as pressures from the global commodity market pushed up fuel, transport, and the cost of doing business across South Africa.

FNB analysts said emerging-market currencies continue to be impacted by headwinds from elevated oil prices and ongoing uncertainty around the United States -Iran peace talks.

The bullion is little changed this morning, following a stronger trade session on Thursday, as hopes of a US-Iran ceasefire eased bets that central banks may need to keep interest rates higher for longer to combat inflation.

Gold prices have stabilised recently but are still down ~14% compared to when the conflict started. This morning, gold is trading at $4 527.31 per ounce.

Oil prices traded lower in yesterday’s session as investors speculated on whether the US and Iran are closing in on a peace deal that could lead to a resumption of flows through the Strait of Hormuz. Brent crude oil is trading rangebound this morning at $104.26 per barrel. Global Equities Markets Climb on US-Iran Peace Deal Hope