Soft Metals Cap ZAR and PEN Upside as Peru Eyes Business-Friendly Policy Shift
Updated
Updated · TradingPedia · Jun 25
Soft Metals Cap ZAR and PEN Upside as Peru Eyes Business-Friendly Policy Shift
2 articles · Updated · TradingPedia · Jun 25
Summary
BNY says falling precious-metals prices are capping gains in the South African rand and Peruvian sol, even with carry trades still supported by high nominal and real yields.
South Africa and Peru are seen as the most exposed because platinum-group metals dominate South African exports, while Peru is the world's No. 3 silver producer with outsized export reliance.
Lower export receipts are eroding both countries' terms of trade, blunting what should otherwise be a more favorable backdrop for metals-linked currencies.
Institutional support may keep the currencies from sharper underperformance: South Africa's inflation mandate and central-bank credibility help the rand, while Peru's expected business-friendly, U.S.-aligned policy shift could lift the sol.