The USD/ZAR currency pair lost ground at the start of the new week, as scrutiny of Fed Chair Jerome Powell and renewed political pressure on the central bank have unsettled confidence in the Federal Reserve’s independence.
Meanwhile, the Rand extended gains, as Gold scaled a fresh all-time high earlier on Monday amid heightened safe-haven demand. South Africa is a major producer and exporter of the yellow metal.
Federal Reserve Chair Jerome Powell said over the weekend he had been threatened by the Trump administration with a criminal indictment over Congressional testimony. Powell said this was a “pretext” intended to mount more pressure on the US central bank to cut interest rates.
The probe into Powell is unprecedented and amplifies existing concerns over the political pressure facing the central bank. While tensions between the Trump administration and the Fed are not new, the latest developments arrive at a particularly delicate moment as the institution moves toward a leadership transition.
FOMC policy makers had signaled just one 25 bps rate cut for 2026, while investors continue to expect two or three rate cuts.
The USD/ZAR currency pair was last down 0.43% on the day to trade at 16.4031.
The Rand was trading not far from a 40 1/2-month high of 16.3025 per US Dollar, which it achieved on January 6th.
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