The South African rand has performed well under trying circumstances.
While the US-Iran peace talks have boosted global business sentiment in the past week, markets appear to be running out of steam this week, and it’s no different for the rand.
Last week’s truce saw the local currency strengthen sharply to R16.31 against the US dollar as global risk appetite improved and Brent crude oil prices fell by 2%, easing local inflation concerns.
However, the rand has been trending weaker since late last week and dipped to R16.50 on Tuesday morning.
The key factor here appears to be a stronger US dollar, as global investors price in a more “hawkish” stance from the US Federal Reserve, which could keep interest rates higher for longer.
