South Africa's rand weighed down by strike fears

Reuters
New South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg
.

View photo

New South African bank notes featuring an image of former South African President Nelson Mandela are …

JOHANNESBURG (Reuters) - South Africa's rand was trading near eight-week lows on Monday as fears of a major strike in the platinum sector knocked investor confidence in the continent's biggest economy.

The rand was at 10.1605 to the dollar at 0557 GMT, marginally firmer than its close in New York on Friday.

It reached a low of 10.2190 on Friday, its weakest level since September 6, after stronger-than-expected U.S. manufacturing data pushed the euro to a two-week low against the dollar and reduced risk appetite.

Workers from South Africa's National Union of Mineworkers began a strike over wages at mid-tier producer Northam Platinum on Sunday evening.

Fears of a strike against top producers Anglo American Platinum, Impala Platinum and Lonmin by NUM's hardline rival, the Association of Mineworkers and Construction Union, are also likely to weigh on the rand.

The strike could hit half of global output.

U.S. non-farm payrolls data on Friday could also keep the rand weaker if it beats expectations.

"The rand is now back at its weakest levels since early September," Absa Capital analysts wrote in a note. "We think that there is scope for further depreciation in the short term, if this week's U.S. labour data proves to be stronger than expected."

The yield on the 2026 and 2015 government bonds each edged down 0.5 basis points to 8.18 percent and 6.04 percent respectively.

View Comments (5)