South African Rand Climbs as World Cup Strike Ends

The South African rand, which posted several weeks of decline as a new wave of risk aversion spread around equities and currency markets, rose as the world cup stadium construction workers strike ended, raising confidence in the country as stability returned.

The South African rand was one of the most punished currencies by a new wave of risk aversion that struck markets last week, as concerns regarding the global slump rose, making the high-yielding emergent market South African rand to be the worst performing among the 16 most traded currencies. This week, risk appetite has returned to markets, and a world cup constructions workers strike that has been lasting for seven days in South Africa has ended, creating a perfect domestic and international scenario for traders to invest once again in the South African economy and currency, making the rand to climb from a seven-week low against the U.S. dollar.

Today the rand’s outlook will be at hands of a U.S. industrial production report, that will certainly direct the level of risk aversion among traders this week. If the report to be released bring optimistic numbers, it is likely that the rand will proceed to rally against low yielding currencies like the yen, otherwise, the South African currency may return to monthly record lows.

USD/ZAR traded at 8.1575 from a previous rate of 8.3120, being the South African rand one of virtually all high-yielding currencies that won against the greenback today.

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