Rand at two-week low, strikes hit sentiment
The strike by Numsa comes a week after platinum miners ended a crippling five-month stoppage.
JOHANNESBURG - The rand fell to a near two-week low against the dollar on Tuesday as a two-day-old strike by South Africa's engineering and metals workers took its toll on already fragile investor sentiment.
The strike by the National Union of Metalworkers of South Africa (Numsa) comes a week after platinum miners ended a crippling five-month stoppage that sent Africa's most advanced economy into contraction in the first quarter of the year.
"Our forecast that 2014 would be a tumultuous year for South African labour relations has come to pass. The five-month platinum strike may now be dwarfed by the metals and engineering-sector strike, cutting GDP growth even more," BNP Paribas said.
The rand hit a session low of 10,7635 to the greenback, its weakest since 20 June and was 0,74 percent weaker at 10,7500 by 1556 GMT, compared with Tuesday's close.
Government debt was also sold on the day, with yields rising 3,5 basis points to 8,38 percent for the 2026 benchmark and 1,5 basis points to 6,735 percent for the instrument maturing next year.
Having broken through key support at 10,6800/7000, the rand now had 10,7700 in its sights, Tradition Analytics said.
"Numsa strike action and disappointing South African data is taking its toll and investor concerns are arising not just due to cyclical features but structural ones as well," it said.
The strike will cost the economy more than R300 million, or 0,014 percent of GDP a day, an employer body has said.