Fresh farm strike fears keep a lid on rand

THE RAND declined in early trade yesterday before firming in the afternoon, as the prospect of a strike in the agricultural industry damped investor demand for the currency. Bonds gained, driving benchmark yields to near-record lows.

At 5pm the rand was bid at R8.5718 to the dollar, 1.79c firmer than at 5pm on Monday.

Yields on 10.5 percent government bonds due in December 2026 strengthened.

Farmworkers are set to resume a strike today in the Western Cape, demanding that the minimum wage be increased to R150 a day, from R69. Two people died as farmworkers burnt down vineyards and sheds, causing damages estimated at R120 million during strikes that began on November 6 last year, according to Agri SA.

“There is talk of some concern about further strike action in the Western Cape, which will keep investors wary of selling dollars too aggressively,” ETM Analytics analyst Quinten Bertenshaw and colleagues said. Dollar demand from South African importers might also weigh on the rand, they added.

Government bonds advanced amid speculation that jobs growth in the US is not fast enough to persuade the Federal Reserve to end its bond-buying programme, which has fuelled demand for higher-yielding assets including emerging market government bonds.

US payrolls increased by 155 000 workers last month.