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Johannesburg - The rand touched a fresh five-year low on Tuesday against the greenback before pulling back, but could breach the 11 to the dollar level in the short term due to the economy's weak fundamentals and the threat of platinum sector strikes.
The rand was at R10.8225/$ at 14:33 GMT, in line with Monday's New York close, after hitting a low of R10.8950/$ earlier in the session, its weakest since late October 2008.
The threat of further labour unrest combined with South Africa's poor fundamentals, including widening current account and budget deficits, is likely to keep the rand under pressure.
"I wouldn't be too surprised to see the rand trading above 11 very soon," said one trader. "With the status quo it could happen quite soon."
The yield on the 2026 government bond climbed 7 basis points to 8.245% while that on the 2015 paper was 1.5 basis points higher at 6.175%.
Earlier on Tuesday, South Africa's Treasury sold a total of R2.35bn of its 2030, 2041 and 2026 government bonds.
The rand was at R10.8225/$ at 14:33 GMT, in line with Monday's New York close, after hitting a low of R10.8950/$ earlier in the session, its weakest since late October 2008.
The threat of further labour unrest combined with South Africa's poor fundamentals, including widening current account and budget deficits, is likely to keep the rand under pressure.
"I wouldn't be too surprised to see the rand trading above 11 very soon," said one trader. "With the status quo it could happen quite soon."
The yield on the 2026 government bond climbed 7 basis points to 8.245% while that on the 2015 paper was 1.5 basis points higher at 6.175%.
Earlier on Tuesday, South Africa's Treasury sold a total of R2.35bn of its 2030, 2041 and 2026 government bonds.
