Risk-On: South African Rand Steadies Versus US Dollar
The South African rand steadied against the US dollar, Euro, and Sterling as pressure on emerging market currencies eased amid risk-on sentiment in global markets.
The US dollar index has broadly weakened as demand for safe-haven assets eased amid hopes of a resolution to the Middle East conflict.
Oil prices were down, and yellow metals fluctuated as US-Iran peace talks reduced pressure from the global energy crisis and inflation concerns, and optimism about a Fed interest rate hike.
In a brief, THE stockbroking and portfolio management subsidiary of First National Bank (FNB) confirmed rand-relative stability on Thursday, citing easing concerns about global oil supplies as continuing to support investor sentiment and emerging-market currencies.
Analysts said progress toward restoring shipping through the Strait of Hormuz has improved sentiment, reducing fears of prolonged supply disruptions and helping to keep inflation expectations contained.
South African rand was quoted at R16.34 per dollar, R18.87 per euro and R21.99 per British pound. At $79.02 per barrel, oil prices remain under pressure as optimism around progress on a Hormuz shipping agreement continues to reduce concerns over major supply disruptions.
Additional pressure came from an unexpected increase in US crude oil inventories, suggesting softer near-term demand conditions.
While geopolitical risks remain, markets are increasingly pricing in the view that energy supply disruptions can be managed, helping to keep oil prices contained.
Gold prices are higher this morning, reaching a seven-week high as lower oil prices and easing inflation concerns have led investors to scale back expectations for further US interest-rate increases.
Markets are increasingly focused on the prospect of a less restrictive monetary policy environment, while also monitoring upcoming US labour market data for further clues on the Federal Reserve’s policy outlook. Gold is trading at ~$4 260 per ounce. #Risk-On: South African Rand Steadies Versus US Dollar# South African Rand Firmer as Fed Hold Decision Weakens US Dollar
