JOHANNESBURG: South Africa's rand was on the back foot against the dollar on Monday and bonds also weakened on worries that job cuts in the mining sector could spark a repeat of last year's violent strikes which dented investor sentiment.
The yield on the benchmark 2026 government bond was up 6 basis points at 6.735 percent while the 2015 issue added 4 basis points 5.04 percent.
The rand briefly flirted with 9.1555, its weakest level in more than two weeks, and was at 9.1425 by 0830 GMT, down 0.51 percent from Friday's close.
Market watchers are wary of a labour union backlash after Anglo American Platinum said last week it would cut 6,000 South African mining jobs, albeit fewer than half the 14,000 initially proposed.
Violent mining strikes last year hit output in the world's biggest producer of platinum and triggered a run on the rand and local debt by mainly foreign investors.
The rand could now target late April's low of 9.1670, a breach of which would see a test of 9.2300, Standard Bank trader Jan de Fouw said.
"Buying dips for now seems to be the way to go as the bad news continues and the dollar is strong against the majors," de Fouw added.
Comments
Comments are closed for this article.