South African Rand Weakens Ahead of Bonds Auction
South African rand weakened marginally on Tuesday despite continued pressure on the US dollar. The rising energy crisis has stoked inflationary pressures, which are anticipated to drive global interest rate hikes.
On Tuesday, the South African local currency, the rand, is trading at R16.25 per dollar, R18.81 per euro, and R22.00 per British pound, said the stockbroking and portfolio management subsidiary of First National Bank (FNB) in a brief.
Softer US economic data last week, including weaker retail sales, employment and inflation readings, have reinforced expectations that the Federal Reserve will keep interest rates unchanged.
The bank said the expectation prompts investors to scale back expectations for further policy tightening. However, rising oil prices and ongoing geopolitical tensions in the Middle East have tempered gains in emerging-market currencies.
With Brent at $91.43 per barrel, oil prices are higher amid fading prospects for a US-Iran peace agreement, which continues to raise concerns over supply disruptions in the Middle East.
Limited progress towards reopening shipping routes through the Strait of Hormuz, continued attacks on vessels in the region and heightened geopolitical tensions have kept a significant risk premium embedded in oil prices.
Gold prices are broadly unchanged this morning, supported by a weaker dollar and expectations of a more cautious Federal Reserve following recent softer US economic data.
Ongoing tensions in the Middle East, together with continued safe-haven demand, have helped underpin the precious metal despite elevated US bond yields. Market reports indicate that gold traded at $4,393 per ounce.
South Africa will hold a bond auction on Tuesday, and market analysts anticipate robust subscription as investors continue to rotate capital into risk-free assets. #South African Rand Weakens Ahead of Bonds Auction# South African Rand Steadies as Fed Rate Hike Bets Ease
