News Column

Rand holds ground despite looming strikes

January 22, 2014

The local currency has regained its footing after stumbling to a five-year low of R10.9620 to the greenback last week, a move some market players felt was overdone. At 5pm yesterday, the rand was bid at R10.8287 to the dollar, less than a cent firmer that at the same time on Monday. This was despite plans by the Association of Mineworkers and Construction Union to launch strikes at the world's biggest three platinum producers this week, a move Finance Minister Pravin Gordhan says will hurt the ailing economy. But market players appear to have priced in the impact of the strikes, a relatively common occurrence in South Africa over the past 18 months. "The local data and the talk of strikes is obviously not good but the market has been hearing about strikes for forever now, and there's perhaps not as much of an impact as before," a trader with a Johannesburg investment bank said. "If there were to be any violence I'm sure there'd be a lot more negative interest." Government bonds were slightly weaker and yields ticked up as investors await what could be a fairly hawkish central bank policy statement next week. Pretoria News


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Source: Pretoria News (South Africa)


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