The Bureau for Economic Research has reported that the rand exchange rate last week clawed back some of the losses of the previous week when a more hawkish tone from the US central bank on the policy interest rate outlook boosted the US dollar and weighed on emerging market currencies.
With the exception of the local 10-year government bond yield, which rose somewhat further last week, most other asset classes reversed at least some of the previous week’s moves.
In particular, the US dollar gave back some of the strong gains of the week before last after several Fed officials continued to emphasise the narrative that the current US inflation spike was likely to be transitory.
This implies that the US policy interest rate could remain ultra-accommodative for some time, the Bureau added.
The softer dollar not only supported the rand, but may also explain why the gold - and in particular the platinum price - was higher on the week.
On the energy front, the Brent Crude oil price made further gains.
The price was supported by declining US oil inventories.
In terms of upcoming oil market developments, all eyes will be on the outcome of an Opec+ meeting on Thursday.
In particular, the focus will be on any agreement to lift Opec+ oil production in coming months.
