S.Africa’s rand steady but labour unrest could weigh

 South Africa’s rand held steady against the dollar on Wednesday in anticipation of further stimulus for the U.S. economy, but the prospect of a nationwide strike in the country’s mining sector could weigh on the currency in the days ahead.

At 0714 GMT, the rand traded at 8.1800 to the dollar, little changed from Tuesday’s New York close of 8.1710.

The market is awaiting the German Constitutional Court’s ruling on the euro zone’s bailout fund on Wednesday and a Fed meeting on Thursday, which could result in another round of bond buying to aid the U.S. economic recovery.

Traders said expectations of quantitative easing have benefited the rand and other emerging market currencies while putting pressure on the dollar.

“Today and tomorrow will be crucial for most emerging markets and the rand especially,” said William van Rijn, a currency trader at Nedbank.

“For the moment the tone is rather dollar negative across the board and hence the rand is currently enjoying levels below 8.20.”

However, unrest in South Africa’s mining sector and calls for a nationwide strike by former ANC Youth League leader Julius Malema could hurt the rand in the days ahead.

The killing of 44 people at Lonmin’s Marikana mine last month has triggered a wave of walkouts by miners demanding wage increases. Addressing strikers at Gold Fields on Tuesday, Malema called for “a national strike in all the mines.”

Analysts say this would worsen the country’s current account deficit, which widened to 6.4 percent in the second quarter of 2012 from 4.9 percent the previous quarter

more at … S.Africa’s rand steady but labour unrest could weigh | News by Country | Reuters.

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