S.Africa's rand on back foot, US vote in focus

Mon Nov 5, 2012 7:01am GMT
 

JOHANNESBURG (Reuters) - South Africa's rand remained on the defensive against the dollar on Monday after hitting a 1-1/2 week low last Friday, with potential for further losses as the looming U.S. election keeps investors nervous about policies in the world's biggest economy.

The rand was at 8.7675 against the dollar at 0643 GMT, 0.12 percent weaker than Friday's close at 8.7570.

The domestic unit slumped more than 1.2 percent on Friday to its softest level since October 24 as better-than-expected U.S. jobs data boosted the greenback.

Local strikes which have hit output in the world's biggest producer of platinum and a key gold producer are still on investors' minds, but should take a back seat this week to the U.S. vote and other global events in driving the rand.

"We've got quite a big week this week with the U.S. elections, Chinese elections and the potential for Greece to vote around its bailout package," said Brigid Taylor, head of institutional sales at Nedbank

"Unfortunately the gold price has also sold off and all in all South Africa still remains under pressure. The rand could potentially trade up as high as 8.85," Taylor added.

Government bonds weakened slightly, with yields on the benchmark 14-year paper and the shorter-dated three year note each edging up 1.5 basis points to 7.7 percent and 5.48 percent respectively.

A new five rand coin is displayed by a South African Reserve Bank worker during its launch at the South African Mint July 27, 2004. REUTERS/ Juda Ngwenya

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