Reuters Johannesburg – The rand firmed slightly against the dollar on Thursday, although it could turn weaker if the latest mining production data comes out negative, turning the screws on an economy in distress.

Eskom also warned that increased winter demand was putting pressure on the national grid.

This is further bad news for a market already nervous that Fitch or Standard and Poor’s could downgrade South Africa’s credit rating on Friday.

By 09:04 the rand was at R10.7350 against the dollar, fractionally up from Wednesday’s New York close at R10.7550.

It was, however, within easy reach of last week’s trough of R10.8050, a level last reached on March 25.

The rand has struggled to make sustained gains against the dollar this year as investors worry about the platinum strike that has dragged on since January, causing mining output to contract in the first quarter of the year.

Mining production figures due out at 11:30 are likely to point to another decline in the second quarter, according to economic analysts polled by Reuters.

With US markets turning weaker overnight, investor appetite for riskier emerging markets could start to wane in the days ahead, Rand Merchant Bank currency analyst John Cairns said in a note.

“We no longer have positive global factors off-setting local negatives. Suddenly both factors are playing in the same direction,” Cairns said.

“Foreigners aren’t panicking, but their shift from aggressive buyers to neutral is enough to leave the rand to weaken.”

Government bonds edged higher in early trade, taking a breather after a heavy sell-off at the start of the week that pushed yields to six-week highs.

The yield on the benchmark 2026 issue dipped 3.5 basis points to 8.425%, while the instrument maturing in 2015 was down 2.5 basis points at 6.77%.