Rand hits 3½ year low

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Analysts say the rand could weaken further in the absence of a resolution to a wave of strikes roiling Africa's biggest economy.

Johannesburg - South Africa's rand remained near a 3½ year low on Monday and analysts said it could weaken further in the absence of a resolution to a wave of strikes roiling Africa's biggest economy.

The rand was trading at 8.800 to the dollar at 0701 GMT on Monday, barely changed from Friday's New York close of 8.7900.

On Friday, it slumped to as low as 8.85 to the dollar, its weakest level since April 2009, after Anglo American Platinum said it had fired 12,000 wildcat strikers.

Analysts said the rand could weaken to as low as 9.00 to the dollar unless measures were taken to limit some of the worst labour unrest since the end of apartheid in 1994.

“The market is trading purely on emotion and sentiment,” said Garth Klintworth, head of fixed income, commodities and currencies at Absa Capital.

“Either we get some strong leadership from trade unions or government or business that improves sentiment or we continue to see very poor sentiment and weakness relative to the dollar. Technically, we could easily get to 9.20.”

Government bonds continued to sell off on Monday, with the yield on the 2015 bond up 8 basis points to 5.51 percent. That on the 2026 paper was 15 basis points higher at 7.81 percent, its highest level since July. - Reuters