Rand upbeat as strike nears an end

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NewRandMoney Reuters.

Johannesburg - South Africa's rand strengthened against the dollar on Thursday, extending earlier gains as platinum companies and miners looked set to reach a deal to end a 20-week old wage strike.

The local currency also tracked other high-yielding emerging markets higher following release of weaker-than-expected US retail sales and unemployment data.

The rand rallied to a session high of 10.6500 to the greenback after workers from Amcu mining union urged their leader to sign a wage deal with the three major platinum firms.

“With certain positive signs coming out the strike negotiations ... and some very dovish data from the US, we've had the rand strengthening, bonds strengthening,” said Citi trader Mark Southworth.

By 17:58 SA time, the rand was at 10.6900 to the dollar, up 0.6 percent from the previous day's close.

Government bonds tracked the rand stronger, with the 2026 benchmark issue falling 9.5 basis points to 8.365 percent, while the 2015 note dropped 11.5 basis points to 6.69 percent.

Local mining data for April added to the positive sentiment, with total output expanding 0.2 percent year-on-year, compared with expectations for a 7.25 percent contraction.

But dealers said South Africa's fragile currency was not out of the woods, with investors nervous ahead of credit rating reviews on Friday which could see Fitch and Standard and Poor's downgrade Africa's most advanced economy. - Reuters

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