The South African Rand has weakened against the US Dollar after data showed that manufacturing and mining production declined in June.
According to Statistics South Africa manufacturing production growth slowed to just 0.4% from the previous year and mining production tumbled by 6.2% year on year after the revised fall of 1.1% in May.
In the morning the Rand had managed to strengthen against the ‘Greenback’ following the release of data showing that China exports and imports increased. The news boosted sentiment to the Rand as China is South Africa’s biggest trading partner. The data also aided other commodity based currencies make gains against their peers.
The manufacturing sector contributes around 15% to South Africa’s Gross domestic product and is vital to keeping down the nation’s already high unemployment rate. According to figures one in four workers work in the manufacturing sector. In an effort to support the slowing sector the South African government has pledged to spend up to R5.8 billion over the next three years to help the sector stave off the impacts of the global downturn by upgrading factories and improve worker training and conditions.
The Rand looks likely to decline over the next few months as further disruptions to the country’s mining and production sectors are expected as wage disputes come to the fore.
“We have been expecting a slowdown back from recent higher levels due to slower external and domestic demand, even despite the weaker currency, as well as some lingering impacts of strike action. This should continue and intensify as we get more widespread strike action in the next two to three months,” said Peter Attard Montalto an emerging market economist at Nomura.
Current South African (ZAR) Exchange Rates:
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.8839 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 15.3320 >
The Euro/South African Rand Exchange Rate is currently in the region of: 13.2008 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 8.9491 >
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 7.8731 >
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.4936 <
(Correct as of 14:25 pm GMT)
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