Moneyweb

As concern grow that the global economy is slowing.

THE rand declined to a one-week low versus the dollar as concern the global economy is slowing and strikes by South African workers overshadowed an unexpected improvement in the country's manufacturing growth.

The rand lost as much as 1,1% to 7,3124 per dollar, the weakest level since August 4, before depreciating 0,6% to 7,2727 by 2pm in Johannesburg, from a previous close of 7,2330. Against the euro the rand gained 0,2% to 9,4687.

Emerging-market stocks and currencies weakened on concern the global economic recovery is faltering after the Federal Reserve said on Tuesday it won't withdraw stimulus measures designed to support an economic recovery. Reports yesterday showed China's industrial output rose the least in 11 months, retail sales growth eased and new loans climbed less than estimated, adding to signs that the world's third-biggest economy is slowing.

The rand also weakened as automotive workers join the almost 1,3 million public sector workers that began protests for higher wages on Tuesday. Talks between government and public sector unions have been postponed until today, the Democratic Teachers Union said yesterday.

Manufacturing growth unexpectedly accelerated an annual 8,8% in June, from a revised 8,1% in May, Statistics SA said yesterday.

Government bonds advanced for the first time in three days, with the benchmark 13,5% security due September 2015 rising 52 cents to R124,92. The yield on the bond fell 12 basis points to 7,50%.

The cost of three-month contracts for cash in one month fell 1 basis point to 6,28%, poised for the lowest closing level since the central bank first introduced its repurchase rate since 1999.

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