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.
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