Rand worst losing streak since 2008

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NewRandMoney Reuters.

Johannesburg - South Africa's rand lost further ground against the dollar on Tuesday, slumping for the ninth straight session, amid an escalation in labour unrest ahead of mid-year wage talks.

The rand was at 9.5490 to the dollar at 17:27 SA time, a drop of more than 1 percent from its close in New York on Monday.

It hit a fresh four-year low of 9.61 earlier and has now declined for a ninth straight session, its longest run of losing sessions since June 2008, when power utility Eskom had to impose rolling blackouts.

Government bonds were also under pressure, with the yield on the 2026 paper gaining 10 basis points to 7.05 percent, its highest in more than a month. The yield on the 2015 issue rose 7 basis points to 5.195 percent.

Ten striking miners at a chrome mine were injured after being hit by rubber bullets, police said on Tuesday, while industrial union NUMSA demanded a 20 percent pay hike for the automotive sector, raising fears of labour unrest in the manufacturing industry.

George Glynos, managing director at ETM Analytics, said the rand “could go anywhere now.”

“It is reflective of how fragile the South African economy is and you see this when sentiment turns sour very, very dramatically in the rand,” he said.

“This market is not moving on technicals, it is moving on fear. You just wait for the next bit of bad news and then it moves to the next leg.”

Finance Minister Pravin Gordhan told parliament that South Africa's economy would suffer if labour relations challenges were not resolved.

“We will see deteriorating confidence, job losses and business failures,” he said. - Reuters


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