This week the standout performers were the Australian and New Zealand dollars. The New Zealand dollar strengthened throughout the week, particularly yesterday following Wednesday night’s interest rate hike. Not only were interest rates increased, but in a statement after the decision the central bank governor flagged the possibility of further rate hikes in the future, stating that it was important to contain inflation level expectations. This increased demand for the currency, pushing up the value by at least 1% against all of its 31 major counterparts. The Australian dollar also took strength throughout the week off the back of some positive data from both Australia and China, Australia’s primary export destination.
The South African rand was the top performer out of the emerging markets, gaining 0.8% against the US dollar. News out of South Africa was that the recent strikes surrounding platinum miners’ pay may come to an end. The strikes have been going on for 20 weeks, but reports emerged yesterday that that union bosses had accepted a wage offer. Platinum is a major commodity produced by the export-reliant nation, and hence the recent strikes have made a notable dent in South Africa’s trade balance.
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