Johannesburg - South Africa's rand extended losses to hit its weakest level in more than five weeks on Monday, weighed down by the threat of labour strife in the crucial automobile and mining sectors.
The rand was at 10.1060 to the dollar at 05h58 GMT, down 0.2 percent from its close in New York on Friday, a level last reached in early July.
Workers downed tools on Monday at the South African unit of Japanese auto maker Toyota, the company said, signalling the start of a nationwide strike in the auto sector over wages.
Tensions also remain high in the mining sector a year after police shot dead 34 striking miners at Lonmin's Marikana mine, which was the deadliest security incident since apartheid ended in 1994..
A stronger dollar could put the rand on the back foot this week as the US Federal Reserve releases its minutes, which could offer hints on when it will scale back its stimulus.
Weak Chinese factory data could also affect the currency.
“The other international headwind for the rand to contend with this week will be Thursday's Chinese PMI data as the reading is likely to remain well below the critical 50 level, which would imply that the manufacturing sector in South Africa's leading export destination is still contracting,” Absa Capital analysts wrote in a morning note.
“Any more negative headlines on the local wage negotiation front could also contribute to further rand weakness.”
Statistics South Africa will release July consumer inflation data on Wednesday and stronger-than-expected data could limit rand losses, the note added.
Government bonds were weaker, with the yield on the 2026 issue rising 10.5 basis points to 8.505 percent and that on the 2015 paper up 10 basis points at 6.29 percent. - Reuters