The rand strengthened for a second day after a strike at South Africa’s state-owned power utility that had threatened to hobble industrial output was averted and as commodity prices increased. The currency of Africa’s biggest economy appreciated as much as 0.7 percent to 7.6794 per dollar, before trading 0.1 percent higher at 7.7315 by 10:37 a.m. in Johannesburg, from a previous close of 7.7364. The National Union of Metalworkers of South Africa welcomed a decision by Eskom Holdings Ltd., the company that supplies about 95 percent of the country’s electricity, to lift its pay offer to 9 percent to avert a strike during the World Cup. Platinum for immediate delivery rallied as much as 1 percent to $1,515.75 an ounce, while gold increased for a second day, gaining as much as 0.3 percent to $1,214.60 an ounce. The two precious metals are South Africa’s biggest exports. “The Eskom strike being averted and rising metal prices are having a positive influence on the currency,” Duncan Howes, a currency trader at Absa Group Ltd. said by phone from Johannesburg. The rand may move between 7.65 and 7.75 in quiet trade as the U.S. markets are closed for the Independence Day holiday, Howes said. Eskom would not have been able to guarantee power supply if unions had gone on strike today, the utility said July 1, adding that a strike would damage the economy and affect the World Cup that ends July 11. Government bonds fell for the first time in four days, with the 13.5 percent security due September 2015 sliding 12 cents to 123.22 rand. The yield on the bond gained 2 basis points to 7.94 percent. Investors increased bets the central bank will reduce its 6.5 percent benchmark interest rate when it next meets on July 22, forward-rate agreements show. The cost of three-month contracts for cash in three months fell 2 basis points to 6.36 percent, equaling a 6 1/2-year low reached on April 21. To contact the reporter on this story: Janice Kew in Johannesburg at jkew1@bloomberg.net.

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