(Bloomberg) — The good news for the rand is that commodity prices are hovering near an eight-year high. The bad news is that raw materials matter less for South Africa’s currency than movements in U.S. Treasury yields.

The correlation between the Bloomberg Industrial Metals Sub-Index and the rand has weakened to 0.2, from a peak of 0.7 in February. The inverse relationship with U.S. Treasury yields is much stronger, at almost 0.6, the most in in four years, according to data compiled by Bloomberg.

That means the rand is more likely to weaken as Treasury yields rise than it is to strengthen as commodity prices climb. Industrial metals account for about a quarter of South Africa’s export earnings, but as U.S rates continue to increase, the benefit of higher prices may be eroded by lower demand for high-yielding currencies.

“Fundamentally, higher metal prices should be supportive for the rand in the long run as it will improve the trade balance,” said Guillaume Tresca, a senior emerging-market strategist at Generali Insurance Asset Management in Paris.

But “higher commodity prices would result in higher inflation or the perception of it,” he said. “This in turn would lead to higher U.S. rates and that is negative for the rand. The commodity-price impact in the short run is limited in my view.”

The rise in U.S. rates has reduced demand for South African stocks and bonds, sparking foreign investor outflows of more than $3.3 billion from the country’s markets this year. That’s weighing on the current-account balance, which may have been as wide as 4.4% in the fourth quarter, data may show on Thursday, according to the median estimate in a Bloomberg survey.

Currency forecasts compiled by Bloomberg see the rand averaging 15 per dollar in the second quarter. That may be too optimistic, especially if the commodity rally eases, according to Lars Merklin, a senior analyst at Danske Bank A/S in Copenhagen. The rand has weakened 5.5% since mid-February to around 15.29 per dollar on Wednesday along with the rise in U.S. yields.

“Both gold and copper have been going lower since U.S. rates started rising,” Merklin said. “I honestly don’t think there is a commodity super cycle to begin with. I also think we will see a tapering of commodity prices.”

Merklin said the rand could weaken back to 17 per U.S. dollar in a move driven by an economic slowdown in Asia and positive U.S. real 10-year yields, or nominal yields above 2%.

Analysts at Rand Merchant Bank expect commodity prices to continue rising, but predict the rand will slide to around 16.50, well weaker than its fair value of around 14.37, as global risk sentiment whipsaws between Covid-19 fear and vaccines hopes.

While commodity prices may support the rand in the short term, risk-off sentiment may prove stronger in the longer run, according to Nedbank Group Ltd.

“Beyond March, this support for the currency from the trade balance may fade,” said Walter de Wet, a Johannesburg-based analyst at Nedbank, in a note to clients. “If foreign portfolio inflows do not take up the slack, a weaker currency, on a more sustainable basis, may well be the result as we head towards mid-2021.”