Rand range-bound as strike looms

220114 AMCU President Joseph Mathunjwa and his members at the labour court hearing after the Judge postponed the judgment for the next 10 days.photo by Simphiwe Mbokazi 453

220114 AMCU President Joseph Mathunjwa and his members at the labour court hearing after the Judge postponed the judgment for the next 10 days.photo by Simphiwe Mbokazi 453

Published Jan 22, 2014

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Johannesburg - South Africa's rand was range-bound against the dollar on Wednesday, with a looming strike by platinum miners apparently priced in.

The rand was at 10.8525 to the dollar at 17:13 SA time, nearly 0.3 percent lower than Tuesday's New York close.

The currency, which reached a five-year low last week, has traded at a range from 10.77 to 10.90 since the start of the week.

A consumer inflation report released on Wednesday provided no big surprises that could push it out of that range.

South Africa's headline consumer inflation rate edged up to 5.4 percent year-on-year in December, slightly below market expectations, from 5.3 percent in November, Statistics South Africa said.

Members of the Association of Mineworkers and Construction Union (AMCU) plan to strike on Thursday at Anglo American Platinum, Impala Platinum and Lonmin.

The stoppage could affect more than half of global platinum production.

The government, led by Deputy President Kgalema Motlanthe, has offered to mediate to try to end the dispute, which threatens South Africa's already struggling economy.

But the start of the strikes will not necessarily weaken the rand further, because sentiment is already negative, analysts said.

“I'm not sure it's going to have much impact, if any. It will have been baked into it,” said ETM's Gareth Brickman.

“Perhaps if there's more violence in the labour unrest, that could rattle investors a bit, if it appears those issues are going to be protracted.”

Government bonds were mixed.

The yield on the 2026 government bond inched up 1 basis point to 8.395 percent.

Yield on 2015 paper declined 3.5 basis points to 6.265 percent. - Reuters

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