The rand gained for the first time in three days amid evidence of a global recovery that may stoke demand for South Africa’s commodity exports and as gold producers moved closer to ending a strike that has shut mines.
Australia’s economy expanded at a faster pace than economists’ predictions in the second quarter, data showed today. The euro-area economy returned to growth in the second quarter after a record-long recession, while U.K. services growth unexpectedly accelerated last month at the quickest pace since 2006. South Africa’s purchasing managers’ index unexpectedly rose to its highest level in six years in August, Kagiso Tiso Holdings said two days ago.
“Risk appetite seems to have moderated,” Mohammed Nalla, head of strategic research at Nedbank Group Ltd., said by phone from Johannesburg. “The rand, being a commodity currency like the Australian dollar, is taking a bit of support on the back of that.”
The rand appreciated 0.8 percent to 10.2530 per dollar as of 4:24 p.m. in Johannesburg. Yields on benchmark 10.5 percent bonds due December 2026 dropped five basis points, or 0.05 percentage point, to 8.52 percent. Metals and other commodities account for more than 50 percent of South Africa’s exports, according to government data.
South African gold producers are closer to a wage agreement with the labor union that called two-thirds of the industry’s 140,000 workers out on strike as talks continue, Charmane Russell, a spokeswoman for the Chamber of Mines at Russell & Associates, said in a text message. Talks will continue today, she said.
A strike may cost the South African gold industry about 349 million rand ($34 million) a day in revenue, with the total cost including lost wages and taxes reaching 597 million rand a day, the chamber says. Workers in the automotive, construction and aviation industries have already gone on strike to demand pay gains in excess of the inflation rate of 6.3 percent in July.