South African Rand Steady as SARB Hawkish Tone Softens
The South African rand is trading flat on Friday as expectations of a South African Reserve Bank (SARB) interest rate hike soften following a weaker-than-expected inflation reading.
The local currency unit is trading at R16.49 against the US dollar, R18.87 against the euro, and R21.72 against the British pound, First National Bank (FNB) said in a brief, broadly steady relative to Thursday’s session.
The Bank revealed that the currency found support from the US-Iran peace deal, which lifted risk appetite across emerging markets.
Domestically, the softer-than-expected May consumer price index print of 4.5% versus the 4.7% estimated also provided modest relief, tempering some hawkish rate-hike expectations.
The South African rand outlook remains positive as investor sentiment in the global commodity market has shifted following an interim peace deal signed by the US and Iran.
Oil prices continue to decline towards pre-war levels, and the yellow metal has begun to find support.
Brent crude is marginally softer at $79.43 per barrel.
The US-Iran peace deal and the subsequent resumption of oil and gas shipments through the Strait of Hormuz, including the first Saudi-owned supertankers to transit since the conflict began, have weighed on prices, as markets price in a gradual recovery in supply.
On the other hand, the Gold price per ounce declined to $1,414.54, a drop of over 2% from the previous session’s level.
The move lower reflects reduced safe-haven demand following the signing of the US-Iran interim peace deal, which boosted global risk appetite and eased fears of a prolonged Middle East conflict, a key driver of gold’s elevated price levels. South African Rand Strengthens Ahead of Inflation
