The Pound Sterling to South African Rand (GBP/ZAR) exchange rate fell to a low of 17.7962 on Monday after a four-week strike in South Africa’s metalworking sector finally came to an end.
The National Union of Metalworkers of South Africa (NUMSA) announced that workers have finally reached a wage agreement with employers.
While neither side got quite the deal they wanted, South Africa’s lower paid workers have been granted fixed annual wage hikes of 10% for three years.
A lack of economic news for the UK meant that these South African developments were the main cause of movement in the Pound Sterling to South African Rand exchange rate.
Given that the five-month long strike in the South African platinum sector had such a detrimental impact on the local economic outlook, investors had been hoping that this wage issue might be more swiftly resolved.
Consequently, the agreement helped the Rand strengthen by 0.3% against the US Dollar and advance on peers like the Pound.
Over 200,000 employees were urged to return to work by the NUMSA general secretary, Irvin Jim. He stated; ‘We urge all our members to report for work as from tomorrow. The settlement offer has been overwhelmingly and unanimously accepted by our members.’
Before the news was made public Rand trader Cheslyn Francis commented; ‘The Rand had the ability to push to the first key point of 10.45, and then probably 10.40 if there Is a resolution to the strike. The resolution would indicate some faith in the South African economy and we might find off-shore bond buyers piling in a bit more money.’
Pound Sterling to South African Rand Forecast
The Pound Sterling to South African Rand exchange rate initially declined after the announcement of the strike’s conclusion was made.
However, the GBP/ZAR pairing later rebounded to trend in the region of 17.9268 prior to the release of UK Mortgage Approvals data.
The US Dollar to South African Rand exchange rate also recovered a firmer footing.
Today we forecast that Rand volatility could be caused by South Africa’s employment figures for the second quarter. Economists are expecting the data to show that South Africa’s unemployment rate fell from 25.2% in the first quarter to 24.7% in the second.
A disappointing result could trigger Rand losses.
The US Consumer Confidence index could have an impact on the US Dollar to Rand exchange rate during the North American session.
Other South African data to be aware of over the rest of the week includes the nation’s Producer Price Index and Trade Balance figures.
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