South Africa's rand gave back some of the strong gains notched overnight after a more dovish than expected statement from the Federal Reserve, with volatile trade likely as investors speculated on the outlook for U.S. interest rates.
At 0703 GMT the rand traded at 12.1190 to the dollar, down 0.34 percent from where it closed on Wednesday in New York.
(READ MORE: S.Africa’s rand tumbles to a new 13-year low)
The yield on the benchmark government bond maturing in 2026 was unchanged at 7.89 percent.
The rand had rallied as much as 3 percent overnight after the Fed downgraded its views on the U.S. economy and signalled a far more gradual path to policy normalisation than many investors had foreseen.
The move looked as overdone as the rand's slide to 13-year lows earlier this month after strong U.S. jobs data boosted the dollar, Standard Bank executive for rand and EM spot trading Warrick Butler said.
(READ MORE: S.Africa’s rand recoups some of steep losses against dollar)
"A range for today, unlike other days, is a complete thumb-suck because anything is possible in this liquidity," Butler said.
"We could see another move back to 11.95 just as easily as we could see a rebound to 12.20/25. That in itself could end up being the range today."