The South African Rand extended a pullback from recent three-month low against the US Dollar on Friday on prospects of the Federal Reserve keeping borrowing costs without change at its September policy meeting.
Although the US Dollar was a notch softer against a basket of major peers on Friday, the currency was still on track to register its longest streak of weekly gains since 2014, underpinned by a set of resilient macro data.
“This optimism is fueled by speculations that the Federal Reserve will maintain elevated interest rates,” Andre Cilliers, currency strategist at TreasuryONE, was quoted as saying by Reuters.
In the absence of specific catalysts, risk-sensitive currencies such as the Rand tend to be affected by global drivers such as central bank monetary policies.
The US Dollar Index was last edging down 0.12% on the day to 104.917.
As of 9:26 GMT on Friday USD/ZAR was edging down 0.43% on the day to trade at 19.0858. Earlier this week, the exotic Forex pair went up as high as 19.3352. The latter has been the pair’s strongest level since June 6th (19.3566).
The South African Rand has tumbled more than 12% against the Dollar since the start of the year.
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