The rand is stronger against the dollar in early trade on Wednesday as the markets reacted positively to the end of the wage dispute at Lonmin’s Marikana mine.
“The end of the Lonmin strike overnight and another global stimulus injection this morning out of Japan place the bias firmly in favour of rand bulls‚” Absa Capital said in their morning report.
At 8.20am‚ the rand was bid at R8.1656 to the dollar from R8.1825 at Tuesday’s close. It was bid at R10.6774 to the euro from its previous close of R10.6764 and at R13.2750 against sterling from R13.2862 before.
The euro was bid at $1.3076 from $1.3042 at Tuesday’s close.
“Lonmin workers will return to work on Thursday after agreeing to an average 22 percent wage increase late yesterday‚ ending a six-week strike at the platinum mine‚” it said.
“Although these wage agreements could prove to be inflationary‚ especially if such increases spread to other sectors of the economy‚ a resumption in the mining production bodes well for the rand from the investor sentiment‚ current account and overall economic growth perspectives‚” Absa Capital said.