The South African rand strengthened yesterday, ending a week-long slide triggered by a walk-out of metal workers as they disputed over pay. News emerged yesterday that an agreement has been made between the 220,000-strong workforce and their employers, as a result we saw a flow of investment returning to the South African economy, helping the South African rand hit its highest level against sterling since before the strike.
A faltering global stock market continued to provide support for the Japanese yen, which furthered the gains achieved on Monday. Traditionally, we see an inverse correlation between the performance of stock markets – more specifically the Japanese stock market – and the Japanese yen, with the currency being viewed as a safe-haven asset. Moreover, the currency took further support yesterday from current account figures released early morning, which showed that the Japanese surplus was larger than most forecasters had predicted.
Elsewhere, the Antipodean pair had a strong day, with the New Zealand dollar touching 3-year highs as Fitch raised its rating for the nation’s economic outlook from stable to positive. The Australian dollar also advanced after business confidence improved.
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