The USD/ZAR currency pair hovered above a 43-month low of 15.7767 on Wednesday, as the Rand continued to draw support from rising Gold prices ahead of the outcome of the Federal Reserve’s and the South African Reserve Bank’s policy meetings.
Gold breached the $5,200 threshold for the first time on Wednesday amid safe-haven rush. South Africa is a major producer and exporter of the yellow metal.
The Fed is widely expected to keep its federal funds rate target range intact at 3.50%-3.75% at its January 27th-28th meeting.
Investors will also be paying close attention to the press conference with Fed Chair Jerome Powell.
The minutes from the Fed’s December policy meeting showed that officials judged rate cuts were likely to be appropriate in 2026 in case inflation subsides over time.
Yet, policy makers were divided in their assessment of risks between higher inflation and unemployment. Some FOMC members expressed greater concern that inflation becoming entrenched could require higher interest rates. Other policy makers favored a greater magnitude of rate cuts to rein in signs of a softening labor market.
The FOMC signaled just one 25 bps rate cut for this year, while investors continue to expect at least two rate cuts.
Meanwhile, the SARB is largely expected to keep its benchmark interest rate without change at 6.75% at its January 29th meeting after a 25 bps cut in November.
The USD/ZAR currency pair was last up 0.16% on the day to trade at 15.8845.
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