JOHANNESBURG Oct 9 (Reuters) – South Africa’s rand firmed
more than 1.4 percent against the dollar on Tuesday, on track
for its first daily gain in five trading sessions, as investors
responded to news that some of the thousands of striking
truckers are returning to work.
Government bonds rallied with the rand and yields pulled
back from multi-week highs as market players saw value in
recently oversold debt, particularly at the longer end of the
curve.
The rand was at 8.7460 to the dollar by 1614 GMT,
up 1.43 percent from Monday’s close at 8.8730.
Reports that about a third of the truckers who had been on
strike have agreed to suspend the action offered a reprieve for
local assets, battered by concerns over the damage to Africa’s
biggest economy from work stoppages that began in August.
Almost 100,000 workers across South Africa, including 75,000
in the mining sector, have downed tools in often illegal and
violent strikes that may hit economic growth this year.
The rand fell more than 2.3 percent against the dollar to a
3-1/2 year low of 8.995 on Monday as the strikes fanned
volatility.
“The currency has already given up a lot of ground and a lot
of bad news is consequently priced in,” Standard Bank said in a
note on Tuesday.
The currency remains vulnerable to a yawning current account
deficit of 6.4 percent of GDP, it cautioned.
On the debt market, the yield on the three-year benchmark
fell 5.5 basis points lower to 5.475 percent while
that for the 14-year issue shaved off nine basis
points to 7.785 percent.
Continued…
