Rand remains muted as tensions mount in the Middle East
The rand began the week subdued on Monday morning as concern about mounting tension in the Middle East hurt global market sentiment.
The local currency has been the worst performing among emerging-market currencies tracked by Bloomberg over the past five days. It ended last week down by almost 2% as emerging markets took a knock as tensions ratcheted up.
US President Donald Trump on Sunday threatened to slap sanctions on Iraq after the latter’s parliament voted for foreign troops to leave the country, including those of the US.
This follows the killing of top Iranian commander Maj-Gen Qassem Soleimani in Baghdad last week.
“In times of great uncertainty, the dollar dominates against emerging-market currencies. Only the good old safe-haven assets buck that trend,” said Standard Bank currency dealer Warrick Butler.
At 10.17am, the rand was flat at R14.3187/$ after weakening to R14.37/$ in intraday trade. It was also little changed at R15.9878/€ and R18.7182/£. The euro was flat at $1.1166.
The growing tension pushed the price of Brent crude oil to its highest level in more than seven months on Monday morning. The latest developments have added to market fears that global oil supply might be affected, as the region is responsible for almost 50% of global output.
Brent crude was up 1.9% to $69.9 a barrel, reaching a high of $70.7 in intraday trade. Gold added 1.25% to $1,571.53/oz and platinum 0.13% to $982.44.
Source: businesslive.co.za