Rand Resurgence: South Africa's Currency Hits Four-Week High Amid New Coalition

The South African rand climbed to a near four-week high against the dollar as investors await cabinet selections following a newly formed coalition government. The rise is attributed to optimism around the pro-business Democratic Alliance's participation. Meanwhile, the Hungarian forint dipped ahead of Hungary's monetary policy decision.

The South African rand rose to a near four-week high against the dollar on Tuesday as investors awaited cabinet selection after the new coalition government was announced, while the forint eased ahead of a monetary policy decision in Hungary.

The rand rose to 18.1125 per dollar, its strongest level since May 22 and recovering from losses driven by election results earlier this month that saw the African National Congress (ANC) lose its majority. Five political parties signed up on Monday to join a government of national unity, including the pro-business Democratic Alliance which is favoured by markets.

"The coalition will be within striking distance of a powerful two-thirds supermajority in the assembly, making structural changes possible," according to a BCA Research note. "Investors need to monitor closely for these changes and whether they are conducive to economic productivity or political stability. A major, positive political change suggests that the rand will rebound versus the US dollar in the near term."

The Hungarian forint eased to 395.77 per euro, having come to close to the psychological 400 level last week. Hungary's central bank is narrowly seen opting for the smallest rate cut in its 14-month-old easing cycle later on Tuesday, a Reuters poll of economists showed, with the majority projecting a 25-basis point reduction, bringing Hungary's key rate down to 7%.

Central and east European currencies were hammered last week as investors grew concerned about the divergent rate outlook in the region and the United States as well as the fallout of victory for far-right groups in the European Parliament elections. Other EM currencies were mostly subdued on Tuesday as investors awaited more U.S. data and speeches from Federal Reserve officials for hints on potential rate cuts after hawkish projections from the U.S. central bank spooked investors last week.

A gauge of developing world stocks rose 0.6%, touching a 20-day high at one point, led by a 2.5% jump in South African stocks and rebounding Chinese shares. The main U.S. stock indexes, the S&P 500 and Nasdaq, scored record closing highs on Monday as technology shares rallied on enthusiasm over artificial intelligence.

HIGHLIGHTS: ** Putin vows trade, security with North Korea beyond reach of West

** South Korea central bank chief says inflationary pressure easing ** Fitch Ratings raises India's 2024/25 GDP forecast to 7.2%

For TOP NEWS across emerging markets For CENTRAL EUROPE market report, see

For TURKISH market report, see For RUSSIAN market report, see

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)