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Rand stronger as freight strike ends

Oct 09 2012 15:02
I-Net Bridge

Johannesburg – The rand rebounded somewhat at noon on Tuesday to R8.74 to the greenback from R8.84/$1 in early Tuesday morning trade‚ after news that members of three of four transport unions engaged in industrial action will return to work on Wednesday. This comes after the rand nearly touched R9.00 to the greenback on Monday due to mining woes and investor jitters.

“The rand is very much headline driven. We see news of 15‚000 freight workers that will return to work on Wednesday‚ which provided a temporary relief rally to the rand. If there is a peaceful resolve to the mining strikes and miners return to work‚ it would be good news for the rand‚” a local trader said.

The Transport and Allied Workers Union (Tawusa)‚ the Professional Transport Workers Union (PTWU) and the Motor Transport Workers Union (MTWU) said earlier on Tuesday that they have advised the Road Freight Employers Association (RFEA) that they will be suspending their participation in the strike as of 4pm on Tuesday afternoon and all their members will be returning to work on Wednesday. The three unions jointly represent about 15 000 employees. The trade union Satawu is still on strike.

At 11.55am‚ the rand was bid at R8.7491 to the dollar from Monday’s worst level of R8.9945‚ Monday’s close of R8.8855 and R8.7575 at Friday’s close.

It was bid at R11.3153 to the euro from its previous close of R11.5222‚ and at R14.0006 against sterling from R14.2327 before.

The euro was bid at $1.2940 from $1.2965 at Monday’s close and $1.3018 at Friday’s close.

The rand’s global backdrop‚ domestic fundamentals and sentiment drivers are currently negative‚ but the currency has already given up a lot of ground and a lot of bad news is consequently priced in‚ Standard Bank said in a note on Tuesday.

“We expect that the rand will occupy a range somewhat weaker than we have seen over the year so far. With considerable qualification in mind‚ a band of R8.50 to R9.00 seems reasonable. However‚ we think that a significant break either side of these bands would more likely be to the upside‚” the bank said.

“We believe that SA’s large external funding requirement‚ by virtue of a gaping current account deficit‚ sits at the heart of the rand’s prevailing woes‚” the bank added.

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rand  |  dollar  |  transport strike  |  markets



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