South African rand firms against dollar as mine union ease demands

JOHANNESBURG (Reuters) - South Africa's rand firmed slightly against the dollar in early Wednesday trade, after striking gold miners offered an olive branch to set deadlocked wage negotiations with mining companies back on track. By 0721 GMT the local currency was at 10.2950 to the dollar, 0.29 percent firmer than its 10.3250 close in New York on Tuesday. South Africa's main mining union said early Wednesday it had offered to lower its wage increase demands to gold companies, raising hopes of a possible compromise that could limit the duration of a strike that has already hit producers. The labour unrest in the gold sector, which started on late on Tuesday, is the latest in a series of recent shutdowns that has already hit the construction and car manufacturing sectors. It is expected to cost South Africa more than $35 million a day in lost output. Dealers say the rand will also struggle against the dollar as the United States economy shows signs of recovery, backing the case for policy makers in the world's largest economy to pull back on bond purchases which have fed billions of dollars into emerging markets. "Strong U.S. data, moves towards war with Syria, and mounting pressures on other emerging markets is a terrible combination for the rand," said Rand Merchant Bank in a morning note. Yields on government bonds were flat to lower, with the 2026 paper unchanged at Tuesday's close of 8.56 percent while the 2015 instrument dipped 2 basis points to 6.505 percent.