The USD/ZAR currency pair hovered above a fresh 43 1/2-month low of 15.6375 on Thursday, as the Rand continued to draw support from rising Gold prices ahead of the outcome of the South African Reserve Bank’s policy meeting.
Gold extended its rally to a new record high above $5,550/oz. amid continued US Dollar weakness, persistent geopolitical tensions and broader economic uncertainty. South Africa is a major producer and exporter of the yellow metal.
On the central bank front, the Federal Reserve left its federal funds rate target range intact at 3.50%-3.75% at its January 27th-28th meeting, in line with market consensus, following three successive rate cuts last year that brought borrowing costs to their lowest level since 2022.
Yet, Governors Stephen Miran and Christopher Waller voted against the policy decision, favoring another 25 bps reduction.
FOMC policy makers highlighted that economic activity had been expanding at a solid pace, job growth had remained slow, while inflation had remained somewhat elevated.
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 0.10% on the day to trade at 15.7627.
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