* Rand pressured by domestic and global woes
* Longer end of yield curve steepens on issuance
expectations
JOHANNESBURG Oct 23 (Reuters) – South Africa’s rand tumbled
more than two percent against the dollar in afternoon trade on
Tuesday as labour unrest in the mining sector combined with
concerns about the slowing global economy to drive investors out
of the local unit.
The rand dropped to 8.81/dollar, its worst level in
a week, after the world’s fourth-largest gold producer, Gold
Fields said it had fired 8,500 striking workers at one
of its mines in South Africa.
“There’s not a whole lot of good news going on in South
Africa at the moment,” said George Glynos of ETM Analytics.
“What impressed me is that it hasn’t weakened prior to
today. We’ve been looking for a weaker rand for the past couple
of trading sessions,” Glynos added.
The local currency was further pressured by a falling euro
which was sold on growing concerns about the effects of the euro
zone debt crisis on the world economy.
Yields at the longer end of the South Africa yield curve
rose up to 11 basis points as investors worried about increased
supply to the back end of the curve two days before the finance
ministry delivers its Medium Term Budget Policy Statement
(MTBPS).
Local media reported that Treasury was looking to manage its
debt redemptions through switching 2017 and
2018 bonds for longer term paper because slower
economic growth meant South Africa would be unable to afford the
repayments as they were.
Continued…
