Rand touches new low on strike threat

Euro/dollar futures and contracts for difference (CFDs) see-sawed between mild gains and losses on Friday, closing below $1.36. The dollar continued its upward trend, bolstered by data showing that US industrial production grew last month. The euro remained under pressure amid the European Central Bank’s commitment to keeping rates low for an “extended period”. Pound/dollar futures and CFDs were the most active contracts on the exchange. The pound bounced back as UK retail sales rose by 5.3 percent last month from a year earlier, marking the fastest annual pace in more than nine years. THE RAND touched a near fiveyear low against the dollar yesterday as the prospect of another wave of strikes in the mining industry was seen hitting a sector that accounts for about 6 percent of output.

The currency slipped to a low of R10.903 to the dollar in the wake of a strike call by the Association of Mineworkers and Construction Union (Amcu), but recovered to be bid at R10.8358 at 5pm yesterday, 1.77c firmer than at the same time on Friday.

Trading activity was muted due to the Martin Luther King public holiday in the US.

Platinum producers Anglo American Platinum, Lonmin and Impala Platinum said they had received notices from Amcu of a strike in 48 hours, setting the stage for another wave of unrest on the restive platinum belt.

Months of violent labour strife in 2012 triggered downgrades of South Africa’s credit rating from agencies Moody’s Investors Service, Fitch and Standard & Poor’s, and sent the rand sliding around 25 percent against the dollar.

Finance Minister Gordhan said South Africa could not afford more labour unrest, calling on the platinum industry to get round the table with workers’ representatives.

“We can least afford another round of strikes that will act as a destabilisation to the platinum sector,” the finance minister said.