Aug. 11 (Bloomberg) -- 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 currency of Africa’s biggest economy lost as much as 1.1 percent to 7.3124 per dollar, the weakest level since Aug. 4, before depreciating 0.6 percent to 7.2727 by 2 p.m. in Johannesburg, from a previous close of 7.2330. Against the euro the rand gained 0.2 percent to 9.4687. The Federal Reserve said yesterday that U.S. economic growth will be “more modest” than anticipated, prompting policymakers in the world’s biggest economy to announce the first steps to bolster output in more than a year. An estimated 31,000 workers at the South African units of Toyota Motor Corp., Nissan Motor Co. and others began striking over wages today, the National Union of Metalworkers of South Africa said. “The news on the manufacturing data is obviously positive but the question is whether the momentum can be sustained, especially if there’s a global slowdown,” said Elisabeth Gruie, an emerging-markets currency strategist in London at BNP Paribas SA, France’s biggest bank. “The rand hasn’t moved that strongly on the data given the Fed’s lower growth outlook and the soft patch we’re seeing in Asia.” Emerging-market stocks and currencies weakened on concern the global economic recovery is faltering after the Fed said yesterday it won’t withdraw stimulus measures designed to support an economic recovery. Reports today 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. ‘Risk Drivers’ “The rand is focused more on global risk drivers,” Julian Wilson, a trader at Citigroup Inc. in Johannesburg, said by telephone. “The U.S. economy is still a long way from recovery and that’s impacting negatively on sentiment toward equities and high yielders.” South Africa’s currency also weakened as automotive workers join the almost 1.3 million public sector workers that began protests for higher wages yesterday. Talks between South Africa’s government and public sector unions have been postponed until tomorrow, the Democratic Teachers Union said today. Manufacturing growth in South Africa unexpectedly accelerated an annual 8.8 percent in June, from a revised 8.1 percent in May, Pretoria-based Statistics South Africa said on its website today. Growth in factory output, which accounts for about 15 percent of the economy, was expected to slow to 6.7 percent, according to the median estimate of seven economists surveyed by Bloomberg. ‘Threaten Output’ Strikes “could be negative for the rand if they last long enough to threaten output,” said Gruie. Government bonds advanced in South Africa for the first time in three days, with the benchmark 13.5 percent security due September 2015 rising 52 cents to 124.92 rand. The yield on the bond fell 12 basis points to 7.50 percent. Money-market investors increased bets that South Africa’s central bank will reduce its 6.5 percent benchmark interest rate at its next meeting on Sept. 9, forward-rate agreements show. The cost of three-month contracts for cash in one month fell 1 basis point to 6.28 percent, poised for the lowest closing level since the central bank first introduced its repurchase rate since 1999. --Editors: Linda Shen, Ana Monteiro. To contact the reporter on this story: Garth Theunissen in Johannesburg gtheunissen@bloomberg.net To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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