The South African rand dropped to its lowest value in roughly five years on Tuesday against the world's reserve currency, pulled down by growing preoccupations about labor disputes at the world's three biggest platinum mines, according to Bloomberg.
Mining production is likely to slow, which will drag down the nation's exports. According to a survey of economists and analysts administered by the news service, mining production dropped moderately more than 7 percent in November 2013 after having advanced 22 percent in October.
"Sentiment is extremely negative and the risk of ongoing rand losses is obvious," states a Tuesday email authored by currency strategist John Cairns with Rand Merchant Bank in Johannesburg, according to Bloomberg. "The list of local negatives is long," and those detriments entail the likelihood of labor strikes, the strategist said.
The rand dropped about 0.5 percent against the greenback on Tuesday, falling to its lowest rate since October 2008 against its rival monetary unit.
The rand's performance is likely to be influenced by policy decisions of the U.S. Federal Reserve regarding the next moves for asset purchases in the U.S., according to Moneyweb.
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