The USD/ZAR currency pair held not far from a 40 1/2-month low of 16.3025 on Thursday, as the Rand continued to draw support from elevated Gold prices and ongoing economic reforms domestically.
The Rand has advanced, as Gold scaled a new all-time high earlier this week amid heightened safe-haven demand. South Africa is a major producer and exporter of the yellow metal.
US President Trump, to an extent, calmed market anxiety over possible US military campaign against Iran, an announcement that seemed to have curbed investor rush to safe-harbor assets.
Trump said he had received assurances that Iranian authorities would stop killing protesters and that he believed there was no current plan for large-scale executions.
Trump also addressed market concerns about the Federal Reserve’s leadership. He said that he had no plan to remove Federal Reserve Chair Jerome Powell, despite an ongoing probe.
In South Africa, an improving fiscal situation, policy coherence and the local central bank’s 3% inflation target have increased investor confidence in price stability.
Additionally, market players continue to keep track of developments surrounding a potential extension of the US trade preference programme, the African Growth and Opportunity Act. It still remains unclear if South Africa will be excluded, given strained diplomatic relations between Pretoria and Washington.
The USD/ZAR currency pair was last down 0.18% on the day to trade at 16.3537.
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