As local trading began the Rand softened against its US peer as investors readied themselves for tomorrow’s South African strike action.
The commodity-driven currency was also weaker against peers like the Pound and the Euro as members of the South African Association of Mineworkers and Construction Union prepared to bring the nation’s platinum and gold sectors to a standstill.
Before the release of South African inflation data Absa Capital commented; ‘Even if CPI does surprise to the upside, Rand bulls are unlikely to get too constructive about the Rand, in light of this week’s planned strikes in the platinum sector and the possibility of some unprotected strikes within the gold sector’.
Statistics South Africa’s inflation report showed a marginal increase in consumer price inflation in the final month of 2013.
In December consumer prices advanced by 5.4 per cent, up slightly from November’s 5.3 per cent figure but less than the reading of 5.6 per cent economists were expecting.
Month-on-month, consumer prices climbed by 0.3 per cent vs. expectations for a 0.4 per cent increase.
The GBP/ZAR pairing experienced modest movement following the price report but went on to fluctuate more notably once shocking UK employment figures were published.
Although economists were expecting the UK unemployment rate to fall, the figure was forecast to edge from 7.4 per cent to 7.3 per cent in the three months through November.
However, the unemployment rate actually dropped to 7.1 per cent – within touching distance of the interest-rate raising threshold of 7.0 per cent laid out by the Bank of England.
The report revealed that the UK economy added 280,000 positions in the quarter through November rather than the 256,000 expected.
Weekly earnings also increased, although by less than forecast.
This morning also saw the publication of minutes from the latest Bank of England policy meeting. The minutes indicated that policy makers currently see little need to increase interest rates despite the rapid improvement in the UK employment sector.
The Pound advanced on several of its major rivals after the figures were published and gained on a comparatively range-bound Rand.
Further movement in the GBP/ZAR pairing could occur this week as a result of UK CBI reported sales data and BBA loans for house purchase figures.
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,17.8774 ,
Euro,,South African Rand,14.6664 ,
US Dollar,,South African Rand,10.8243 ,
Australian Dollar,,South African Rand,9.5499 ,
New Zealand Dollar,,South African Rand,8.9832 ,
Canadian Dollar,,South African Rand,9.8520 ,
[/table]
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