The South African Rand tumbled to 0.9970 against the US Dollar and fell against the Pound and other most traded peers after the latest manufacturing PMI data unexpectedly contracted for the first time in six-months.
According to the Kagiso PMI manufacturing fell sharply in September falling by 7.4 points to fall below 50 and come in at 49.1. Any figure below 50 indicates contraction. Kagsio Tiso Holdings, the sponsor of the Index revealed that the disappointing figure now means that South Africa’s manufacturing PMI is below that of both the Eurozone and China, South Africa’s biggest trading partners.
The cause of the decline is being blamed on the continuing labour unrest that has plagued the South African economy over the past year. The organisation that represents local producers said that the ‘protracted industrial action we have seen in the vehicle manufacturing , automotive components and platinum sectors’ was to blame.
“Intermittent mining sector disruptions and fears about future industrial action may also be weighing upon manufacturers, if this is the case, an end to the vehicle component strike and a quick resolution to the Association of Mineworkers and Construction Union’s strike in the platinum mining sector should see an imminent rebound in activity and orders,” said Abdul Davids, head of research at Kagsio Asset Management.
Also weighing upon the Rand was yesterday’s data release which showed that South Africa’s trade deficit widened unexpectedly to its biggest gap in seven months.
Current South African (ZAR) Exchange Rates:
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 10.0200>
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 16.2660 >
The Euro/South African Rand Exchange Rate is currently in the region of: 13.5758 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.4515 >
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 8.3121 >
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.7252 <
(Correct as of 11:45 am GMT)
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