JOHANNESBURG: South Africa's rand nudged higher versus the dollar on Wednesday on news some striking truckers were returning to work, but struggled to hold earlier session highs as investors worried that the labour unrest besetting the country is far from over.
The rand initially rallied to 8.6151/dollar, its strongest level since Friday, but retreated to 8.7148 by 1643 GMT, up just 0.27 percent from Tuesday's close.
The rand has taken a knock as investors eye strikes that have hit Africa's biggest economy, with almost 100,000 workers across the country, including 75,000 in the mining sector, downing tools to press for higher wages and better working conditions.
The rand tumbled to a 3-1/2 year low of 8.995 on Monday as the strikes weighed on sentiment and market watchers warned on Wednesday the currency was still vulnerable.
"We're seeing some positive news of guys returning to work but I just don't think it's going to help the rand recover to the levels we saw prior to these things," said Ion de Vleeschauwer, chief dealer at Bidvest Bank.
The currency's heavy fall to within a whisker of 9.0 to the dollar on Monday prompted market speculation of official intervention to prop it up, but Governor Gill Marcus on Wednesday reiterated her stance that the central bank had no target level for the currency.
"I think eventually we will breach the 9.00 and trade weaker on the currency ... because the fact that this labour unrest has gotten out of control in such a fashion has dented our image," de Vleeschauwer added.
The rand's gains on Wednesday boosted bonds, and yields inversely fell, with the three-year benchmark dropping 8.5 basis points to 5.39 percent while the 14-year paper closed nine basis points lower at 7.69 percent.
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