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.
South Africa's currency broke through the week's range, falling to 8.6215 to the dollar in early trade, weakening for the third straight day as 8.55 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 said at the start of the week its Kusasalethu mine in western Johannesburg 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 3-1/2-year low against the dollar.
The rand is now likely to try for the 8.67 low hit on Jan. 4.
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 percent hit in the previous session.
The 2015 note was at 5.3 percent, its lowest since Dec.21 when it hit 5.285 percent.
South Africa releases manufacturing production data at 1100 GMT, where economists expect output growth to have slowed to 2.2 percent in November from 2.5 percent in October.
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