Rand hits record lows amid strike concerns

August 14, 2015, 10:27am
Image: Shutterstock

Rand hits record lows amid strike concerns

Johannesburg - The rand pushed to fresh 14-year lows against the dollar on Friday, and was at its weakest ever against the pound, hit by worries about the local economy and prospects of imminent US policy tightening.
The threat of wage strikes in the gold sector brought back to the fore investors' concerns about the ailing economy, which is grappling with its worst electricity crisis since 2008, analysts said.
The rand stumbled to a session low of R12.8895/$, the weakest it has been since December 2001.
By 09:05 it was at 12.8500, down 0.34% from Thursday's close and on track for its biggest weekly loss since the week ended July 24.
It also fell to an all-time low of R20.1071/£, according to Thomson Reuters data.
The rand was among the five weakest performers against the dollar in a basket of emerging market currencies tracked by Reuters.
The currency tends to be vulnerable to bouts of emerging market sell-offs because South Africa relies heavily on portfolio inflows to plug its current account deficit.
"The rand looks edgy at weak levels, at risk from data and with one eye still on China," Rand Merchant Bank analyst John Cairns said, referring the to the devaluation of China's yuan currency which rattled markets earlier in the week.
"Local news is worrying as the breakdown of wage talks raises the prospect of a strike in the gold industry," Cairns added.
Government bonds weakened alongside the rand, with the yield for the 2026 benchmark nudging 2 basis points higher to 8.175%.

News24