Rand weaker as strike drags on

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NewRandMoney Reuters.

Johannesburg - South Africa's rand traded weaker on Monday after the Numsa union rejected the latest wage offer from employers at the weekend and threatened to escalate a two-week-old strike.

Market watchers predicted range-bound trade in the run-up to Thursday's monetary policy decision, where a small majority of the 31 analysts polled by Reuters expect the Reserve Bank to keep interest rates unchanged.

At 08:43 SA time the rand was trading 0.43 percent softer at 10.7480 to the dollar compared with its closing level on Friday.

Government bonds were also weaker, with yields nudging up a basis point each to 8.365 for the 2026 benchmark and to 6.715 percent for 2015 paper.

“The rand faces risks from numerous central bank events this week but the bias of probabilities is still for dampened range-bound trade,” Rand Merchant Bank currency analyst John Cairns said in a note.

“Meanwhile, against hopes, the Numsa strike has still not ended - although the news that the union has reduced its wage increase demand is at least positive.”

The strike by the National Union of Metalworkers of South Africa is the latest blow to the economy, which contracted in the first quarter of the year after a five-month platinum sector stoppage hit mining and manufacturing output. - Reuters

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