South African rand firms on commodity boost
- The rand traded at 17.0525 against the dollar , about 0.4% up from its previous close
JOHANNESBURG: The South African rand was firmer in early trade on Monday, supported by broad gains in commodity prices as investors continued to assess the conflict in the Middle East.
At 0654 GMT the rand traded at 17.0525 against the dollar , about 0.4% up from its previous close. Gold prices edged up on Monday as the dollar softened, but gains were capped by a surge in energy prices that fuelled inflation worries.
“The USD/ZAR has held up surprisingly well. South Africa is benefiting from being a commodity exporter in a world where commodity prices are rising broadly,” said Andre Cilliers, currency strategist at TreasuryONE.
Oil prices are heading for a record monthly rise with Brent crude rallying above $115 a barrel after Yemen’s Houthis launched attacks on Israel over the weekend, widening the ongoing war and adding to inflation woes.
Cilliers noted that now Brent crude has broken above the $114.80 resistance level, the next technical target for oil is $127 a barrel.
“A sustained oil strength at those levels could start unwinding the precious metals rally that has been protecting the rand,” said Cilliers.
Data from the South African Reserve Bank showed that M3 money supply growth last month was 8.39%, up from 7.44% in January.
Private sector credit growth for February was 10.50%, above January’s 8.83%. South Africa’s benchmark 2035 government bond was weaker in early deals, as the yield rose 5 basis points to 9.19%.
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