The South African Rand was close to a two-week low against the Pound on Thursday after investor appetite for the currency waned after supporters of the ruling ANC clashed with police after confronting members of the opposition Democratic Party.
Already spooked by labour unrest investors are growing concerned as tensions rise between South Africa’s two main political rivals ahead of general elections on May 7th. The clashes began after the Democratic Party bussed thousands of supporters into Johannesburg to protest against high unemployment. The ANC rallied its own supporters to defend its headquarters in the city.
The two sides aggressively squared up to one another before violence broke out. Police which had taken up positions between the two rival groups responded by firing rubber bullets and stun grenades. According to police protestors lobbed petrol bombs and rocks.
The confrontation ended when the Democratic Party supporters left the area in a bid to prevent further violence. Investors are nervous that tensions between the two sides could spill over into further violence in the run up to the elections.
“Will every voter now get the point about what an undemocratic and violent and intolerant organisation the ANC is. We knew we were not getting to our destination from the start, because the ANC came with missiles, petrol bombs, bricks and stones. I was amazed that the police allowed them to do that,” said the leader of the Democratic Party Helen Zille in an interview on South African television.
Investors widely ignored the release of data which showed that mining production in the country increased more than expected in December. On a yearly basis output climbed by 12% whilst on a monthly basis output rose by 6.2%, beating expectations for a fall of -2.9%.
Sterling remained supported by yesterday’s Bank of England quarterly inflation report in which the BoE raised its growth forecast for the UK.
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,18.4100 ,
Euro,,South African Rand,15.1336 ,
US Dollar,,South African Rand,11.0699 ,
Australian Dollar,,South African Rand,9.9188 ,
New Zealand Dollar,,South African Rand,9.2279 ,
Canadian Dollar,,South African Rand,10.0813 ,
[/table]
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