Rand slides on strike fears, dollar strength
The prospect of labour unrest in the mining sector continues to unnerve investors.
JOHANNESBURG - South Africa's rand began the week on the back foot, sliding more than two percent against the dollar earlier on Monday on lingering fears about labour unrest and a stronger dollar.
The rand was at 10.1739 to the dollar at 1454 GMT, down 2 percent from Friday's New York close. Earlier in the session it fell 2.7 percent to 10.2439.
The prospect of labour unrest in the mining sector continues to unnerve investors as union AMCU has threatened an illegal strike this week if Lonmin does not recognise it as the majority representative body.
Standard and Poor's upgrade to the US credit outlook to stable from negative has also boosted the dollar, hurting the rand.
"The reason why you are seeing this extra bit of rand weakness come in has been because currencies are adjusting to this upgrade all over the place," a trader said. "The dollar is broadly stronger since the S&P upgrade and that has helped weaken the rand to its lows."
Government bonds were weaker, with the yield on the 2026 paper up 32 basis points to 8.265 percent and that on the 2015 issue 17 basis points higher at 6.31 percent.