News Column

Strikes have rand on the ropes, with 5-year low in sight

January 23, 2014

THE rand traded within striking distance of last week's five-year low against the dollar today, signalling a rough session as workers in the mining sector went on strike for higher wages. Members of the Association of Mineworkers and Construction Union , the platinum sector's main union, downed tools at Anglo American Platinum , Impala Platinum and Lonmin , the world's top three producers of the metal. The rand, which lost a quarter of its value last year partly due to investor concerns about strikes, was down 0.46 percent at 10.9250 compared with its close in New York yesterday. Government bonds weakened in tandem, driving the yield for paper due in 2026 6.5 basis points higher to 8.46 percent. The instrument due in 2015 climbed 5.5 basis points to 6.32 percent. A steady stream of negative strike-related headlines, coupled with pressure on commodity currencies in general from data pointing to slowing demand from key consumer China , could see the rand surpass last week's low of 10.9620. This would take it to its softest level since October 2008 . "Not all is right with the world of rand," Standard Bank trader Warrick Butler said in a note to clients. - Reuters Daily News

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Source: Daily News (South Africa)

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