Stronger US Dollar Keeps South African Rand on Edge
The South African rand remained on edge amid hawkish expectations from the US Federal Reserve and hotter-than-expected inflation. Amid a significant easing of the global energy crisis, oil prices have been declining, trading at pre-war levels.
This boosted South Africa’s inflation outlook following a sharp rise in the country’s consumer price index (CPI) to 4.5% in May, and an inflation-chasing 25-basis-point policy rate hike by the South African Reserve Bank (SARB).
The rand is trading softer against crosses on Friday, with the dollar fetching R16.52, the euro at R18.79, and the pound at R21.79, said First National Bank (FNB) in a brief.
The Bank said the currency is under pressure from a broadly stronger US dollar, underpinned by resilient US 1Q26 GDP growth data released overnight and renewed expectations of a Federal Reserve rate hike.
The hotter-than-expected May PPI print also weighed on the rand by complicating the SARB’s rate path. Brent crude is trading just below $74 a barrel and is heading for a weekly loss as accelerating tanker transits through the Strait of Hormuz ease supply concerns following the interim US-Iran deal.
However, downside was capped after a Singapore-flagged container ship was struck by an unidentified projectile in the Strait on Thursday, which reignited some uncertainty around safe passage through the waterway.
Gold is trading at around $4 138.21 and is on track for a fourth consecutive weekly decline, weighed down by a stronger US dollar, rising real yields on the back of sticky US inflation and Fed rate hike expectations.
The yellow metal price was impacted by selling pressure from investors liquidating gold positions to cover losses in the broader tech-led equity rout in Asia. #Stronger US Dollar Keeps South African Rand on Edge Oil Prices Fall Further as Strait of Hormuz Traffic Returns
