South African Rand Weakens as Gold Extends Losses
The South African Rand weakened across the board, trading lower against the US dollar, the Euro and the British pound, on Tuesday as gold, the country’s major export earner, came under pressure.
The rand weakened against most major currencies this morning and is trading at R16.56 to the dollar, R19.40 to the euro, and R22.40 to the pound, First National Bank (FNB) said in a note.
Rand weakened as investors continued to assess the impact of ongoing US-Iran negotiations and how they may affect key interest rate decisions later in the week.
Gold is trading at $4 658.23 per ounce, extending losses from the previous session as market participants shift their attention towards the US Federal Reserve’s interest rate announcement later this week.
While current expectations are guiding a hold, Fed officials have noted that additional increases could be warranted if inflation persists above target levels, which is not a favourable outlook for a non-yielding asset like gold.
Brent crude oil is trading at $109.49 per barrel, continuing its upward move from the previous session, as markets assess the prospects for a durable ceasefire and a possible reopening of the Strait of Hormuz following Iran’s new proposal to the US.
