Johannesburg - The
rand weakened early on Thursday, retreating further from a key resistance level
with investors nervous about holding the currency given labour unrest in the
farming and mines sectors.
The currency broke through the week's range, falling to
R8.6215 to the dollar in early trade, weakening for the third straight day as
R8.55 resistance provided a tough barrier for rand bulls.
Hundreds of farm workers in the main fruit-producing Western
Cape region enter a second day of a wage strike on Thursday.
Bullion producer Harmony Gold Mining Company [JSE:HAR] said
at the start of the week its Kusasalethu mine remained closed and could be
permanently shut after managers received death threats.
The mine employs 6 000 people and its closure will add to
South Africa's 4.7 million people without work.
"The big threat remains the mines and we expect some
further disruptions to production this year. After last years' experience the
market is likely to treat any labour unrest cautiously," John Cairns, a
currency strategist at RMB, said in a note to investors.
The labour clashes in Africa's largest economy will keep
investors wary of holding rands after strikes that started in the mines in
August hit economic growth and sent the currency to a three-and-a-half year low
against the dollar. The rand is now likely to try for the R8.67 low hit on
Yields on benchmark government debt dropped 1 basis point
each because of offshore investors buying on expectations that global monetary
easing was on the cards this year, which would likely result in extra cash
flowing into emerging markets.
The European Central Bank holds a policy meeting later in
the session and the Bank of Japan will hold one in two weeks time.
The 2026 issue held at a four-year low of 7.115% hit in the
The 2015 note was at 5.3%, its lowest since December 21 when
it hit 5.285%.
South Africa releases manufacturing production data at 11:00
GMT, where economists expect output growth to have slowed to 2.2% in November
from 2.5% in October.