The Pound (GBP) to South African Rand (ZAR) exchange rate strengthened on Wednesday as the UK currency was supported by positive unemployment data and as the South African currency was weakened by the ongoing strike in the metals sector.
Worries that the strike could drag on for a sustained period of time like the one seen in the platinum mining sector has damaged sentiment towards the Rand.
Concerns increased on Tuesday after employers in the metals and engineering sector withdrew an offer for a 10% pay rise to workers.
The withdrawal came after the striking National Union of Metalworkers of South Africa (Numsa) stuck to its demands of a rise of between 12% and 15%.
The strike is having a negative knock on effect to the nation’s major car manufacturers with Nissan being the latest company to halt production at its factories. The news comes after both Ford and Toyota also suspended production.
‘On top of our normal challenges with labour, there are some industries which are affected by strikes every single year, whether directly or indirectly. The production stoppages send out a very negative message to investors,’ said an economist at NKC Independent Economists.
The strikes have had a major negative impact upon the South African economy. The strike is thought to be costing the South African metals and engineering industry around R300 million a day.
Further losses for the Rand were held in check after data showed that retail sales increased more than forecast in May. Yearly sales increased by 2.4% compared to expectations for a rise of 0.8% and on a monthly basis sales increased by 0.8%, better than the previous months figure of 0%.
The Pound strengthened after data showed that the UK’s unemployment rate fell to 6.5%. Further gains for the currency were retrained however by the release of a separate report which showed that wage growth remains very weak.
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,18.3166 ,
Euro,,South African Rand,14.4696 ,
US Dollar,,South African Rand,10.6952 ,
Australian Dollar,,South African Rand,9.9960 ,
[/table]
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