The South African rand traded around 16.1 per USD, approaching its highest level since March, helped by a softer dollar and higher prices for key precious metals, inlcluding gold and PGMs. Developments in the Middle East continued to influence global risk sentiment, with investors assessing the implications for inflation and the path of interest rates. Despite the uncertain global backdrop, the rand has shown uncharacteristic resilience this year, with volatility remaining relatively subdued despite the oil price shock, the war in the Middle East and changes in US Federal Reserve policy. In South Africa, higher petrol and diesel prices have already taken effect, following the latest monthly adjustment, as the Middle East crisis keeps international oil prices elevated and adds to inflationary pressures. South Africa’s inflation rate fell to 4.3% in July from 5% in June, but higher fuel prices could reverse some of that progress, complicating the central bank’s decisions.