Johannesburg - The rand strengthened against the dollar to
its strongest level in a week on Friday after freight employers said they had
reached a wage deal to end a three-week truck drivers’ strike.
The unit rallied to R8.61/dollar soon after the announcement
at about 04:30 GMT. Further details on the deal are due at 08:00 GMT.
By 06:40 GMT the rand had given up some of those initial
gains but was still up 0.33% at R8.6310 against the dollar, compared with a
R8.66 close in the New York market on Thursday.
“We knew the rand would strengthen when this labour issue
was resolved, and it’s done that. Now it’s a question of how far it will go -
R8.60-R8.75 will probably be the range,” said Ion de Vleeschauwer, a dealer for
Bidvest Bank.
The rand has been pressured by two months of labour strife, which saw it trade just shy of the psychologically
key R9 level on Monday.
The R8.61 level is the rand’s strongest level in a week and
puts it in line to test its previous high of R8.4820 but the unit will find
R8.60 a tough barrier to break, dealers say.
“I’d be cautious about getting too optimistic on the truck
drivers going back to work,” de Vleeschauwer said. “It’s helped the rand to
regain a couple of cents but importers are going to take advantage of this,
make no mistake.”
Government bonds firmed with the currency and yields dropped
4.5 basis points to 5.375% on the benchmark 2015 note and 7.5 basis points to
7.685% on the 2026 issue.
At 09:00 GMT, the Treasury is looking to sell R800m of
inflation-linked paper due in 2025, 2038 and 2050. Results are due after the
auction closes and dealers expect yields to clear slightly better-than-market
levels.
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