South African Rand Weakens on Peace Deal Durability Concerns
The South African rand weakened against the US dollar and other crosses on Monday amid doubts over the durability of the Iran-U.S. peace deal and a hawkish Fed outlook.
Oil prices rose in global commodity markets as the threat of military action in the Middle East heightened supply risks and could undermine market peace arrangements between Washington and Tehran.
The local unit is weaker against its major crosses, First National Bank (FNB) said in a brief on Monday, as the stronger dollar pressures the rand following the Fed’s hawkish tilt, with markets now pricing in two potential US rate hikes.
Also, doubts over the durability of the US-Iran peace deal and a delay in Swiss negotiations added to risk-off sentiment. The rand is trading at R16.44 against the US dollar, R18.82 against the euro, and R21.70 against the British pound.
Oil prices traded higher following the postponement of US-Iran peace talks in Switzerland and a slowdown in tanker traffic through the Strait of Hormuz, which prompted a partial reversal of the week’s steep losses.
Brent crude oil is trading at $79.33/barrel amid signs of progress in ongoing peace talks between the US and Iran.
The bullion is trading higher, following fresh reports of progress in peace talks between the US and Iran, which include a roadmap toward a final peace deal within 60 days.
This development provided safe-haven demand; however, investor sentiment remains fragile. This morning, gold is trading at~$4 177/ounce. South African Rand Steady as SARB Hawkish Tone Softens
