The South African Rand to Pound exchange rate strengthened on Thursday as positive data out of China bolstered demand for riskier assets and GDP data out of the UK sent the Pound lower against several major peers.
Demand for riskier assets received a boost early on Thursday after improved manufacturing PMI data out of China eased investor concerns that the world’s second largest economy is slowing down.
The South African Central Bank opted to leave interest rates unchanged at 5.5% as concerns over the impact of the ongoing strike in the nation’s platinum mining sector stayed policy makers hands.
The currency also found support from last night’s rather dovish US Federal Reserve policy meeting. US policy makers said that due to the slack in the nation’s economy interest rates will remain unchanged for a sustained period.
“Dovish (Fed) minutes overnight, combined with better-than-expected Chinese PMI data should ensure that the rand maintains a firming bias into this afternoon’s monetary policy committee meeting,” said Barclays Africa in a note.
The Rand remains vulnerable to the effects of the ongoing platinum miners’ strike.
The strike is the longest and costliest industrial action in South African mining history, hitting 40 %of global production of the precious metal used for emissions-capping catalytic converters in cars. It has grown increasingly violent as growing numbers of workers have attempted to return to work.
Today a member of the NUM union was murdered on his way to work. It is the fifth killing in the past fortnight.
“He is one of the NUM members who returned to work last week and he was threatened that he should stop going to work by the striking workers,” the union said.
Demand for riskier assets was little impacted by news that Thailand’s military seized control of the government. Some economists even said that the move could be a good thing as it will end six-months of unrest which has harmed the Thai economy.
Including Thursday’s coup, the military has attempted 19 coups in 80 years; 12 have been successful.
South African Rand (ZAR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,South African Rand,17.4805 ,
Euro,,South African Rand,14.1589 ,
US Dollar,,South African Rand,10.3515 ,
Australian Dollar,,South African Rand,9.5641 ,
[/table]
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