Publications
Partners
Johannesburg - The rand fell to a new four-year low against the dollar on Wednesday as fears over the current account deficit and ongoing labour unrest got the better of foreign investor sentiment.
The local unit broke through previous support at R9.19/20/$ which triggered stop-losses that fuelled movements to even lower levels.
“The rand is being driven by a combination of factors‚” said a local currency trader. “There has been an ongoing scenario in the labour market over the last couple of sessions‚ with strikes at Exxaro and today and yesterday at Anglo American. As a result the international markets are growing increasingly uneasy about the local labour situation.”
The trader said that poor retail figures released today also set the tone for the day’s trade‚ ” That along with the euro touching 1.3000/$ - having sat very close to its lows recently – would have created a perfect storm.”
Earlier in the day the local currency had touched R9.1985/$ on news that there was an illegal strike at Anglo American’s Kleinkopje mine.
The company confirmed this morning that production had resumed at the Kleinkopje coal mine after an illegal walk-out by workers stopped production yesterday morning.
“First thing this morning we had news that there was an illegal strike at Anglo’s Kleinkopje mine‚” said Ockert van Niekerk‚ head of trading at PSG. “In addition sentiment remains on the downside because of the current account pressure.”
Van Niekerk was cautious about the prospects of the domestic currency in the short-term. “I think we’ll see R9.30/$ before we see R9.05/$ again. We can expect some resistance at R9.20/$ but if we break through that at any point in time it could easily slide to R9.25‚” said Van Niekerk.
At 14:23 the rand was bid at R9.2251/$ from R9.1634/$ at Tuesday’s close having jumped to an intraday low of R9.2346/$ earlier in the day. The local currency was bid at R11.79/€ from its previous close of R11.9399/€ and at R13.6878 against sterling from R13.7880 before.
The euro was bid at $1.3022 from $1.3030 at Tuesday’s close and $1.3032 at Monday’s close.
The local unit broke through previous support at R9.19/20/$ which triggered stop-losses that fuelled movements to even lower levels.
“The rand is being driven by a combination of factors‚” said a local currency trader. “There has been an ongoing scenario in the labour market over the last couple of sessions‚ with strikes at Exxaro and today and yesterday at Anglo American. As a result the international markets are growing increasingly uneasy about the local labour situation.”
The trader said that poor retail figures released today also set the tone for the day’s trade‚ ” That along with the euro touching 1.3000/$ - having sat very close to its lows recently – would have created a perfect storm.”
Earlier in the day the local currency had touched R9.1985/$ on news that there was an illegal strike at Anglo American’s Kleinkopje mine.
The company confirmed this morning that production had resumed at the Kleinkopje coal mine after an illegal walk-out by workers stopped production yesterday morning.
“First thing this morning we had news that there was an illegal strike at Anglo’s Kleinkopje mine‚” said Ockert van Niekerk‚ head of trading at PSG. “In addition sentiment remains on the downside because of the current account pressure.”
Van Niekerk was cautious about the prospects of the domestic currency in the short-term. “I think we’ll see R9.30/$ before we see R9.05/$ again. We can expect some resistance at R9.20/$ but if we break through that at any point in time it could easily slide to R9.25‚” said Van Niekerk.
At 14:23 the rand was bid at R9.2251/$ from R9.1634/$ at Tuesday’s close having jumped to an intraday low of R9.2346/$ earlier in the day. The local currency was bid at R11.79/€ from its previous close of R11.9399/€ and at R13.6878 against sterling from R13.7880 before.
The euro was bid at $1.3022 from $1.3030 at Tuesday’s close and $1.3032 at Monday’s close.
