Rand flat as Iraq fears cap

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NewRandMoney Reuters.

Johannesburg - South Africa's rand was flat against the dollar on Wednesday as heightened tensions in Iraq tempered domestic optimism about platinum miners returning to work after the end of a five-month strike.

Workers from the Amcu union signed a wage agreement with the three top platinum producers on Tuesday but production is only expected to return to full swing in three months.

However, the end of the costliest strike in South Africa's history is a relief for Africa's most advanced economy, which shrank in the first quarter as a result of the stoppage.

The local unit was trading at 10.63 to the dollar at 08:56 SA time, just 0.04 percent firmer than Tuesday's close in New York.

“Hard work begins now to get workers ready to go underground, to get platinum mines profitable again and to restore faith in the economy as an investment destination,” said Christie Viljoen of NKC Independent Economists.

“The local unit found support as the dust settled following the costliest strike in the nation's history.”

Emerging market gains were capped by tensions in Iraq and Barclays Capital said the rand would remain sensitive to developments in the Middle East.

It could also weaken if US durable goods data expected on Wednesday is robust.

Government bond yields were little changed, with the yield for the bond maturing next year slipping 0.5 basis points to 6.690 percent while the 2026 issue was down 0.5 basis points to 8.350 percent. - Reuters

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