* Rand weaker on EU summit jitters
* Shorter end of bonds gain
JOHANNESBURG Oct 18 (Reuters) – South Africa’s rand
weakened against the dollar on Thursday as traders moved out of
assets seen as risky, such as emerging market currencies, ahead
of a European Union summit later in the day.
The rand was 0.37 percent weaker at 8.6311 against
the dollar at 1513 GMT from last night’s close of 8.6020 in New
York.
This week’s “rand rally was overdone. Basically we have got
the EU summit over the next two days, which is the uncertainty,”
said Brigid Taylor, head of institutional sales at Nedbank.
EU leaders were due to meet on Thursday, to try to bridge
deep differences over plans for a banking union. It will be the
fourth time they have met this year and the 22nd summit held
since the crisis erupted in Greece in late 2009.
From a local perspective, months of wildcat strikes are
becoming less of a factor for traders as they switch focus to
other global issues. But several mines still cannot haul ore out
of the ground due to the strikes that have hit the platinum and
gold sectors hard.
Gold Fields said most miners returned to work at
its strike-hit South African operations on Thursday but a new
walkout at Lonmin’s Marikana platinum mine dampened hopes of an
end to the labour unrest.
“There are still some skeletons in the closet that will have
to be resolved,” Taylor added.
On fixed incomes, the yield curve flattened with
shorter-dated bonds weakening and the longer-end gaining
strength.
The three year bond rose four basis points to 5.4
percent while the longer dated fell 2.5 basis points
to 7.585 percent.
(Reporting by Vuyani Ndaba; Editing by Jon Herskovitz, Ron
Askew)
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