The South African Rand pushed higher against the Pound on Tuesday as the UK currency fell due to investors embarking on a round of profit taking.
The BoE is expected to raise its growth forecasts for the economy and the UK jobless rate is expected to fall from 6.9% to 6.8%. If so then expectations will rise that the Bank will raise interest rates earlier than forecast.
The Rand meanwhile was finding support from increased demand for emerging market assets.
The currency remains under pressure against the US Dollar as concerns over the ongoing strike in South Africa’s platinum mining sector weigh. Over the weekend four people were killed in violent clashes as tensions rise as a result of the four-month long strike.
Lonmin Plc is pushing ahead with reopening its mines, a move that was welcomed from employees eager to get back to work. The violence came as those wanting to work were assaulted by those wanting the strike to continue.
Data released today showed that the 15-week long strike has impacted the nations mining production.
On a month by month basis production declined by -5.5% in March, a slight improvement on the revised figure of -5.7% recorded in the previous month. On a year by year basis mining production fell by -5.5% adding to the -5.7% figure recorded in February.
The mining strike is expected to carry on for at least another month.
“Eventually the state will have to intervene and together the producers and the state have a lot more power than the AMCU. I think there will be more casualties along the way,” said Mark Rosenburg from Eurasia Group in an email to Bloomberg.
The Lonmin strike has led to a 40% fall in global platinum production and hurt the national economy which relies on mineral exports. South Africa recently lost its position as Africa’s biggest economy to Nigeria.
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,17.3868 ,
Euro,,South African Rand,14.1838 ,
US Dollar,,South African Rand,10.2880 ,
Australian Dollar,,South African Rand,9.6474 ,
[/table]
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