Rand weakens as Ukraine fans risk aversion

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IOL pic mar25 rsa bank notes Reuters File picture: Siphiwe Sibeko

Johannesburg - South Africa's rand weakened against the dollar on Friday, weighed down by global risk aversion spawned by political tensions in Ukraine, while a deal to resolve a three-month strike in the local platinum sector remains elusive.

The rand traded at 10.6545 against the greenback by 06h48 GMT, down 0.32 percent from its previous close.

Government bonds also edged lower, nudging yields for the 2026 and 2015 instruments up a basis point each to 8.525 percent and 6.85 percent respectively.

The rand has struggled against the dollar in recent days, hitting a three-week low of 10.6625 on Thursday as investors worry about a widening conflict between Russia and the West over Ukraine.

“Given that the rand remains highly correlated to the level of global risk appetite, we believe that the risk lies in extended rand weakness into the South Africa long weekend, so long as there is nervousness surrounding Ukraine,” Barclays Africa said in a note.

South African markets will be closed on Monday for a national public holiday.

Investors are also concerned about the lack of a resolution to end a mining strike which has hit output at the world's largest platinum producers.

On Thursday, the companies said they would take their latest wage offer directly to employees, after they failed to reach a deal with the Association of Mineworkers and Construction Union to end the 13-week strike. - Reuters

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