Rand softer as Numsa strike looms

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NewRandMoney

Reuters.

Johannesburg - South Africa's rand faltered against the dollar on Monday as investors braced for a new wave of labour unrest only a week after producers and miners finally reached agreement to end a crippling five-month platinum strike.

The local unit's losses were mitigated by a narrower-than-expected trade deficit of 6.57 billion rand in May, from a 13.03 billion rand shortfall in April.

But turbulence lies ahead as more than 220,000 members of South Africa's NUMSA engineering and metalworkers union are due to strike on Tuesday after last-minute wage talks failed.

“Everybody's worried about it and the longer this strike continues, the more problematic it will be for the currency,” Bidvest Bank chief dealer Ion de Vleeschauwer said.

The rand reversed Friday's modest gains, and was down 0.45 percent at 10.6375 to the greenback by 19:05 SA time compared with its last close in New York.

Government bonds were similarly weaker, with yields edging up 1.5 basis points each to 8.325 percent for the 2026 benchmark and 6.705 percent for the instrument due next year.

The rand's fall was tempered by dollar inflows from local companies repatriating foreign funds for their financial year-ends.

“From tomorrow onwards we'll see more rand pressure, that's for sure,” de Vleeschauwer said. - Reuters


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