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Rand flat, NUM wage demands in focus

Wage negotiations on the gold mining sector could put pressure on the local currency.

South Africa’s rand was flat against the dollar early on Friday, consolidating its recovery from Thursday’s one-month low, but it could come under pressure ahead of wage negotiations in the gold mining sector.

At 0641 GMT the local unit was trading at 12.1475 against the dollar, broadly in line with its 12.1550 New York close.

Sources in the National Union of Mineworkers told Reuters on Thursday the union was set to demand a 75 percent wage hike for workers in the gold sector next week, suggesting protracted negotiations and possible industrial action in the mines.

“The rand is looking frail even after having clawed back some of yesterday’s extraordinary losses,” John Cairns of Rand Merchant Bank said in a market note.

U.S. durable goods data due later in the session could provide direction for the dollar. Traders were also waiting for a meeting of eurozone finance ministers and central bankers to discuss the Greek debt crisis and an economic reform plan.

South African government bonds were stronger, with the yield on the 2026 benchmark down 2.5 basis points to 8.060 percent.

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