The South African (SA) Rand was steady in early trade on Thursday, as geopolitical tensions and safe-haven demand eased after United States (US) President Donald Trump backed down from new tariff threats and proposals to annex Greenland by force, while a firmer dollar also pressured prices.
Rand traded at 16.26 against the Dollar , little changed from its previous close of 16.2550.
Like other risk-sensitive currencies, the Rand often takes its cue from global drivers such as US policy.
At the start of the week, Trump’s escalating stand-off with European countries sent gold to new highs and helped drive SA Rand to a 3-1/2-year high of approximately 16.29 per Dollar, said Umkhulu Treasury in a research note.
“The Rand’s rally was fuelled by a combination of safe haven demand for gold which surged toward $4,824 per Ounce due to ongoing concerns over US Federal Reserve independence, and domestic data showing December inflation held steady at 3.6%, supporting hopes for a balanced interest rate path,” said Umkhulu Treasury.
Domestically focused investors looked at inflation on Wednesday, which showed a slight increase in December, as expected, but analysts said they still expect the central bank to deliver several interest rate cuts this year as price pressures remain well contained.
–Reuters–
