Trade report 26/06/2013
The threat of sustained ZAR weakness due to former President Nelson Mandela’s ill health is overplayed. Whilst Mr. Mandela is a global icon, he has not played a significant role in politics for over a decade. Whilst Mr. Mandela’s passing will be very sad when it occurs, sustained ZAR weakness would be unjustified. The fundamental justification for the ZAR vulnerability is however the massive imbalances that SA continues to have and the over-reliance on foreign investors and inflows to keep these imbalances financed. The USD-ZAR is expected to trade at 10.00-10.2500.
On Tuesday the Association of Mineworkers and Construction Union (Amcu) demanded a 100% pay increase for all unskilled and semi-skilled employees in the South African gold mining sector. The wage demand was enclosed in a detailed memorandum to the Chamber of Mines. The demand for a 100% wage increase is seen as a direct challenge to the 60% increase that rival union National Union of Mineworkers (NUM) demanded last month.
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