South Africa's rand slightly up but strikes, weak economy limit gains

New South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg
South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg January 17, 2013. REUTERS/Siphiwe Sibeko

JOHANNESBURG (Reuters) - South Africa's rand firmed slightly against the dollar on Friday although worries about domestic labour unrest and a wide current account gap will keep gains in check, despite global pressure on the greenback as the U.S. government remains in shutdown.

Government bonds also edged higher in early trade, with yields dipping 3.5 basis points to 7.98 percent for the benchmark and 2 basis points to 6.075 percent for the shorter-dated 2015 issue.

By 0651 GMT the rand was up 0.3 percent against the U.S. currency at 10, compared with its close in New York the previous day.

The rand largely tracked a firmer euro, the currency of one of South Africa's key trading partner regions, which edged within reach of a 2013 peak against the struggling dollar as the U.S. standoff continues.

But South Africa's own problems, including persistent strikes especially in the mining sector and a current account deficit of nearly 6 percent of GDP, point to losses ahead for the rand, which has shed nearly 19 percent of its value so far this year.

"(South Africa) also has a plethora of issues which everyone is still keeping in the back of their minds and so the rand is also struggling to take advantage of the recent dollar woes," said Standard Bank trader Warrick Butler.