The South African Rand was weaker against the Pound but managed to regain some lost ground against the US Dollar on Thursday as mining production data came in better than economist forecasts.
According to the data mining production in South Africa increased by 0.2% on a year on year basis, better than the expected decline of -4.7% forecast by economists. On a month by month basis production surged by 7.9%, smashing forecasts for a decline of -5.5%.
Despite the better than expected data the Rand was unable to make gains against the bolstered Pound as events elsewhere dented demand for riskier assets. The ongoing strike in the platinum mining sector has also weighed upon demand.
On the geopolitical front worries over Ukraine and its ongoing struggle against pro-Russian separatists resurfaced after rebels continued their insurgency in the east of the country. Tensions could ease however after newly elected Ukrainian
President Petro Poroshenko said that he was ready to discuss peace terms if the militants lay down their arms.
The situation in Iraq however seems to be getting worse as terrorists from the Islamic State in Iraq and the Levant (ISIS) took control of several major cities and advanced within 43 miles from the capital of Baghdad.
On the domestic front the Rand remains under pressure by the five-month long strike in the nation’s platinum mining sector and as concerns over South Africa’s energy supplies were renewed. State power utility Eskom said yesterday that increased electricity demand could see a repeat of last year’s blackouts which negatively impacted the economy.
“The markets continue to focus on the impending ratings reviews from S&P and Fitch tomorrow, the ongoing strike action and the effects of load shedding from the power utility,” Nedbank Capital said, adding that all these factors had left the Rand vulnerable to further weakness.
The Pound meanwhile remains supported by yesterday’s better-than-expected unemployment data and increased optimism that the UK economic recovery is broadening.
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,18.0585 ,
Euro,,South African Rand,14.5129 ,
US Dollar,,South African Rand,10.7430 ,
Australian Dollar,,South African Rand,10.0668 ,
[/table]
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