South Africa’s rand recovered steep recent losses early on Monday as the dollar slipped, giving emerging currencies a reprieve as a recent commodity rout eased.
At 0825 GMT the rand firmed 0.2 per cent to 12.5902, pulling back from a near a 14-year low on Friday, pressured by signs of a deepening economic slowdown in China.
The unit remains well above technical support levels around 12.58 and could come under pressure later in the week after the U.S. Federal Reserve concludes its monetary policy meeting.
While the Fed is expected to only hike rates in September, the slant of its policy statement on Wednesday is likely to favour dollar buying.
“Should Ms Yellen prove to be slightly more hawkish given the nature of the recent U.S. economic data, the market may also start looking at pricing in the potential for two hikes this year,” said Warrick Butler, a trader with Standard Bank.
Yields on government bonds fell, with the benchmark issue due in 2026 1 basis point lower to 8.14 percent.