Rand weakens due to Amplats stay away

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IOL world currency1 Graphic: Renjith Krishnan.

Johannesburg - South Africa's rand softened against the dollar on Tuesday amid fears of more trouble in the mining sector after Anglo American Platinum's said workers at its Rustenburg operations were likely to stay away following violence the previous day.

The rand was at 8.9100 against the dollar at 08:21 SA time, 0.2 percent softer than New York's Monday close, with analysts seeing the currency testing the 8.95 level during the session.

“It's all on what has happened at Amplats. That is driving it at the moment. Sentiment is not good,” said David Gracey, a trader at Investec in Johannesburg.

Workers at the world's largest platinum producer are likely to stay away from work on Tuesday in solidarity with colleagues injured in clashes between rival union factions, the company said.

At least 13 workers were wounded by rubber bullets or machetes on Monday, the first major mine violence this year after deadly strife in the sector in 2012.

Market participants will also watch the Treasury sale of 2.1 billion rand spread over the 2031, 2036 and 2048 government bonds.

The sale is due at 11:00 SA time.

More important for the bonds will be the release of inflation statistics on Wednesday, with economists seeing the January year-on-year consumer inflation figure flat at 5.7 percent.

Government bonds also softened, with the yield on the three year issue up one basis points to 5.36 percent and that on the longer dated 14-year paper up half a basis point to 7.32 percent. - Reuters

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