Good morning,

On the wires…

• The SARB raised interest rates by 25-basis point to 7%.
• Iran, US reach deal to extend ceasefire, pending Trump’s approval.
• Capture master key: Lone clerk orchestrated R1.8bn dirty Tembisa Hospital deals.
• Portugal breaks hottest May day record as Europe swelters in heatwave.
• Isle of Man TT competitor killed in qualifying crash.
• Sinner falls to Cerundolo in five-set Roland Garros stunner.  

Quote of the day

“Diamonds are intrinsically worthless, except for the deep psychological need they fill.” — Nicky Oppenheimer

The indicators

Currency crackdown…

FXOne would like to thank ChatGPT Pro for its neutral contribution to the currency comment this morning.

The rand was firmer overall this week, strengthening against the major currencies.

• By Friday morning, the key levels were roughly:
  
  • USD/ZAR: R16.23
  • EUR/ZAR: R18.91
  • GBP/ZAR: R21.81
• The main driver was improved global risk sentiment. Markets became less defensive as geopolitical concerns around the Middle East eased slightly, with talks of a potential peace deal appearing to move closer, supporting emerging-market currencies like the rand.
• The rand also benefited from higher South African interest-rate expectations, with the SARB’s hawkish stance making rand assets more attractive to investors.
• Gains were partly limited by a firmer US dollar at points in the week, as sticky US inflation kept markets cautious on the timing of possible Fed rate cuts.
• Commodity moves also mattered. Softer precious-metal prices, especially gold and PGMs, reduced some of the rand’s support because South Africa is a major commodity exporter.
• Overall, it was a rand-positive but still volatile week. The currency strengthened, but remained sensitive to oil prices, Middle East headlines, US inflation data, Fed expectations, and local monetary policy.

On the radar…

• EUR – German CPI

Did you know?

The thickest skin on the human body is the bottom of the feet.