The South African rand traded below 16 per USD, hovering near its strongest level since the Iran war began in late February, amid growing expectations of rate hikes. Renewed flare-ups in the Middle East kept global oil prices elevated and prompted another sharp adjustment in domestic fuel prices. This is expected to add to inflation pressures and may lead the South African Reserve Bank (SARB) to raise rates later this month to defend its target range. South Africa's inflation rate fell to 4.3% in July from 5% in June, amid softer oil and food prices. The August's reading will be closely watched to assess the extent of price pressures. The SARB has so far resisted raising rates in response to the oil shock, holding rates in April and July. Meanwhile, speculation is growing that the central bank may deliver a 25 bps rate hike at its next meeting on September 23. Elsewhere, a stronger-than-expected US jobs report raised bets on a Fed September rate hike.