The South African Rand to Pound Exchange Rate edged higher on Friday after news broke that striking metal workers were coming closer to making a deal with employers to end a four-day long walkout.
The General Secretary of the National Union of Metalworkers of South Africa (NUMSA) said that the strikers and employers were ‘not very far from each other’ on coming to a deal over a pay dispute. The news increased optimism towards the Rand.
More than 220,000 workers led by NUMSA are demanding a wage rise of between 12% and 15%, figures that are double the nation’s inflation rate.
The strike is expected to cost the South African economy around R300 million a day in lost production.
On Thursday the South African currency fell sharply after police clashed with striking workers as they blocked the entrance to the construction site of a much needed power station.
The strength of the Rand remains shaky as concerns over the strikes damaged sentiment towards the currency; investors are concerned that this latest round of labour unrest could be just as damaging as the 22-week long strike in the nations platinum mining sector.
Worries over a further credit rating cut are also weighing.
‘The possibility of further sovereign rating downgrades in 2014 remains high, the strikes would negatively impact the delivery of the much needed power stations which have impeded growth,’ said an economist from Rand Merchant Bank.
Against the US Dollar the South African Rand exchange Rate was treading water due to the closure of the US markets for the Independence Day holiday.
Against the Euro the Rand was firmer after the single currency was weakened by weaker-than-forecast German factory orders data.
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,18.3936 ,
Euro,,South African Rand,14.5841 ,
US Dollar,,South African Rand,10.7289 ,
Australian Dollar,,South African Rand,10.0400 ,
[/table]
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