Rand under pressure from strikes

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NewRandMoney Reuters.

Johannesburg - South Africa's rand hovered near its previous close against the dollar on Monday and could weaken during the week as investors worry about the impact of incessant labour unrest on the fragile economy.

The local unit barely moved on Reserve Bank data showing net gold and foreign exchange reserves edged up slightly to $44.828 billion in June from $44.506 billion in May.

By 08:43 SA time the rand traded at 10.7715 to the greenback, only a fraction off Friday's close of 10.7700.

Government bonds were weaker at the start of trade, with yields rising 2.5 basis points to 8.42 percent for the paper due in 2026 and 6.765 percent for the 2015 note at the shorter end of the curve.

“The balance of risks favours a weaker rand over the coming days,” said Barclays Africa in a note.

Market participants said mining and manufacturing output data due out on Thursday would offer the latest indicator on the impact of strikes that have plagued the economy since the start of the year, leading to a contraction in the first quarter.

Impala Platinum said on Monday workers were continuing a wildcat strike over wages at its Marula mine as a nationwide stoppage in the metals and engineering sectors by over 200,000 members of the NUMSA union which started last week shows no signs of ending.

Implats and rivals Anglo American Platinum and Lonmin, the world's biggest producers of the precious metal, are still reeling from a five-month strike in South Africa that ended in late June. - Reuters

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