USD/ZAR: Conflict keeps Rand pressured – Commerzbank

Commerzbank’s Volkmar Baur highlights that the South African Rand has been one of the clear losers from the Iran conflict, hurt by weaker precious metals exports and higher imported energy costs. Despite improving GDP, investment and current account data, Commerzbank warns that the challenging external environment is likely to keep the Rand under pressure for now.

Stronger fundamentals versus external shocks

"Since the start of the month, the South African rand has lost nearly 6% against the US dollar, making it one of the clear economic losers of the Iran conflict."

"As precious metals are key export commodities for South Africa, the rand is also suffering."

"Furthermore, fourth-quarter current account figures showed that foreign trade is also developing positively."

"Overall, the outlook for South Africa remains positive."

"However, the current environment is likely to remain challenging for South Africa and put the rand under further pressure."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)