The USD/ZAR currency pair edged lower on Tuesday, as media reports indicated that the United States and Iran could engage in further discussions aimed at securing a longer-lasting ceasefire before the current two-week truce expires.
US President Donald Trump stated that Iran had made contact and was now seeking to restart negotiations. Vice President JD Vance similarly pointed to continued diplomatic efforts and a possible route toward de-escalation in US-Iran tensions.
The Rand drew support from rising Gold prices. The precious metal bounced off a one-week low amid US Dollar softness. South Africa is a major producer and exporter of the yellow metal.
Meanwhile, oil prices dropped below $100 per barrel, as signs of potential dialogue between the United States and Iran to end their confrontation eased supply risk concerns.
The drop in oil prices has tempered some of the hawkish tone surrounding the Federal Reserve’s policy outlook. Markets are now pricing in a 31% chance of a 25 basis point Fed rate cut by year-end, compared to about 13% last week.
Still, persistent instability in the Strait of Hormuz is limiting more aggressive selling of the US Dollar.
The USD/ZAR currency pair was last down 0.60% on the day to trade at 16.3540.
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