With a broadly bullish Dollar triggering a commodities sell-off on Friday, currencies including the Euro and Rand weakened. The decline of platinum and gold, two of South Africa’s biggest export earners, saw the Rand weaken to 9.1530.
At the current exchange rate 1 US Dollar will purchase 9.1095 South African Rand as of 10:45 am GMT
As the European session opened the Rand was still on the back foot against the US Dollar due to fears that mining sector job cuts could result in violent strikes – like those seen last year.
Anglo American Platinum (Amplats) initially intended to slash 14,000 South African mining jobs. Although they have now revised that figure to 6,000 there is still a strong possibility of Labour Unions taking a firm stance against the job losses.
But as it stands over 60% of the platinum mines in South Africa are now unprofitable, with almost all having to reduce production. Amplats is the largest producer of platinum in the world, but with profits falling and the platinum market suffering, the company needs to take drastic measures to survive.
In an announcement in January Amplats outlined its intention to cut 14,000 job cuts and dispose of four shafts. The decision caused an intense backlash and Amplats spent two-months in discussions with the Department of Mineral Resources to see if it could limit job losses. Now one of the four shafts scheduled for closure will remain operational.
Some have viewed Amplats decision to revise its restructuring plan as evidence of government interference.
As one South Africa-based forex trader commented: ‘Perceptions are what count, so no matter what spin the company, trade unions and the government put on this, the overseas perception is that the government is interfering and that means the Rand is a sell, not a buy.’
This afternoon’s advance US retail sales figures could inspire movement in the USD/ZAR pairing, but investors will also be looking ahead to Wednesday and South Africa’s own retail sales data.
Current South African Rand (ZAR) Exchange Rates
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The South African Rand/US Dollar Exchange Rate is currently in the region of: 0.1100 <
The South African Rand/Euro Exchange Rate is currently in the region of: 0.0849 <
The South African Rand/Pound Sterling Exchange Rate is currently in the region of: 0.0717 <
The South African Rand/Australian Dollar Exchange Rate is currently in the region of: 0.1100 <
The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.1095 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 13.9494 >
The Euro/South African Rand Exchange Rate is currently in the region of: 11.7700 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.0885 <
(Correct as of 10:45 am GMT)
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