JOHANNESBURG Oct 10 (Reuters) – South Africa’s rand nudged
higher versus the dollar on Wednesday on news some striking
truckers were returning to work, but struggled to hold earlier
session highs as investors worried that the labour unrest
besetting the country is far from over.
The rand initially rallied to 8.6151/dollar, its
strongest level since Friday, but retreated to 8.7148 by 1643
GMT, up just 0.27 percent from Tuesday’s close.
The rand has taken a knock as investors eye strikes that
have hit Africa’s biggest economy, with almost 100,000 workers
across the country, including 75,000 in the mining sector,
downing tools to press for higher wages and better working
conditions.
The rand tumbled to a 3-1/2 year low of 8.995 on Monday as
the strikes weighed on sentiment and market watchers warned on
Wednesday the currency was still vulnerable.
“We’re seeing some positive news of guys returning to work
but I just don’t think it’s going to help the rand recover to
the levels we saw prior to these things,” said Ion de
Vleeschauwer, chief dealer at Bidvest Bank.
The currency’s heavy fall to within a whisker of 9.0 to the
dollar on Monday prompted market speculation of official
intervention to prop it up, but Governor Gill Marcus on
Wednesday reiterated her stance that the central bank had no
target level for the currency.
“I think eventually we will breach the 9.00 and trade weaker
on the currency … because the fact that this labour unrest has
gotten out of control in such a fashion has dented our image,”
de Vleeschauwer added.
The rand’s gains on Wednesday boosted bonds, and yields
inversely fell, with the three-year benchmark dropping
8.5 basis points to 5.39 percent while the 14-year paper
closed nine basis points lower at 7.69 percent.
(Reporting by Stella Mapenzauswa; editing by Ron Askew)
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