South African rand rose after huge sell-off last week
The South African rand climbed against the US dollar for the third consecutive session on January 14, 2016. Heavy selling in the currency saw a weak opening at the start of the week. A sluggish economic outlook combined with concerns of a slowdown across China don’t warrant sustained gains in the rand. However, an increase in the Chinese trade surplus on January 13 and a recovery in commodity prices globally have been driving long positions in the rand. The South African economy is highly dependent on its Chinese counterpart in terms of raw material export trade. Recently, insufficient electricity resources, severe drought conditions, and contracting export volumes have been plaguing the rand.
Mining production rose in November
South Africa’s mining production rose on a monthly basis by 2.4% in November—compared to a rise of 1.7% in the previous month. On an annual basis, the mining production in November fell by 0.8%—compared to a fall of 4.7% in October and expectations of a 3.7% fall. In November, gold production rose by 2.2%—compared to a fall of 7.8% in October.