South African rand holds firm despite stronger dollar and weak metals
- The rand traded at 16.6325 against the dollar , little changed from its previous close of 16.6497
The South African rand remained steady against a stronger US dollar despite weaker gold and platinum prices, though analysts warn of the economy's underlying vulnerabilities.
- South African rand's resilience against the US dollar.
- Impact of weaker gold and platinum prices on exports.
- South Africa's economic vulnerability to external shocks.
JOHANNESBURG: The South African rand was steady early on Tuesday, shrugging off a stronger US dollar even as weaker gold and platinum prices weighed on South Africa’s export earnings and terms of trade.
At 0651 GMT the rand traded at 16.6325 against the dollar , little changed from its previous close of 16.6497.
The US dollar index , which measures the greenback against a basket of currencies edged up, driven by easing expectations of a Federal Reserve interest rate hike this month.
Gold and platinum, South Africa’s key exports, eased on Tuesday also pressured by the firmer dollar.
ETM Analytics said the rand has remained resilient despite a firmer US dollar, even as weak gold and platinum prices and elevated oil prices weighed.
“As an economy, SA remains vulnerable to more shocks. Still, the full effects can sometimes be masked by lower foreign participation… That should not be confused with a rising belief that SA is doing something right,” said ETM Analytics in a note.
South Africa’s benchmark 2035 government bond was firmer in early deals, as the yield fell 3.5 basis points to 8.85%.