• 10 tips to find bargains

    Susan Erasmus gives advice on how bargain hunters can get the most bang for their buck.

  • Inside Labour

    Labour's bitter breaches need to be seen in historical context, says Terry Bell.

  • Rich getting richer

    Economists differ on how to tackle the chasm between rich and poor, says Leopold Scholtz.

Loading...
See More

Gold strike talks hammer rand

Aug 22 2013 09:44 Reuters

(http://www.shutterstock.com)

Related Articles

Gold sector strike: A question of when

Rand will be closer to R11/$ by year end - expert

Labour strife fears push rand over R10/$

Gold wage talks stuck, strike risk rises

Marcus: Financial crisis not over

Emerging market currencies under pressure

 
Johannesburg - The rand dropped to a new four-year low against the dollar early on Thursday after wage talks in the gold sector stalled and the country's main mine union said it planned to ask members to vote on a strike.

Gold mine stoppages would inflict more damage to the economy, which is already losing $60m a day to a strike by 30 000 workers in the car manufacturing sector that  accounts for 6% of gross domestic product .

The rand was at R10.370/$ at 08:13, in line with Wednesday's New York close, after hitting a low of R10.4450, its weakest level since March 2009.   

The strikes highlight weak economic fundamentals, including widening budget and current account deficits.

Data on Wednesday showed headline consumer inflation accelerated to 6.3% year-on-year in July, from 5.5% in June, breaching the ceiling of the central bank's target band.. 

"We've got such bad labour issues at the moment. Unemployment continues to get worse," said an FX trader.

"The rand will weaken...slightly more than other currencies against the dollar because of the fundamentals - labour strikes across the board and the general bad news that continues to circulate."

Minutes from the US Federal Reserve on Wednesday did little to dampen expectations that the central bank will begin tapering its monetary stimulus this year, although officials offered few clues on the timing.

The prospect of a reduction in the Fed's bond purchases will also affect investor sentiment towards emerging markets like South Africa as US Treasury yields rise.

"We are in the midst of what is becoming a fully-fledged emerging market crisis and the rand as one of the riskier candidates stands at the forefront," Tradition Analytics wrote in a morning note.

The benchmark 2026 government bond weakened to a 20-month low, with the yield climbing 9 basis points to 8.68%, while the yield on the 2015 issue rose 7.5 basis points to 6.475%, its highest in two months.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

rand  |  labour unrest  |  gold  |  markets  |  mining  |  currencies

NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
13 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

Brought to you by BizNews

More from BizNews

We're talking about:

SMALL BUSINESS

Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.
 
 

10 most expensive cars In the world

This is car porn at its best!

 
 

Luxury living

Seven of the most expensive children's toys ever made
5 millionaires turned murderers
The youngest billionaires in the world and how they made it
Watch: Flying first class has never been this luxurious!

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

How do you see your boss? He/sheis:

Previous results · Suggest a vote

Loading...