Johannesburg - The rand recouped some of its steep losses on Wednesday as investors sold dollars to book profits, but still hovered near 13-year lows it hit after a sell-off of emerging market currencies in the previous session.
At 13:05 GMT the rand was trading 0.84 percent stronger to the dollar at 12.2645, after earlier hitting a session high of 12.2445. But the levels remained the lowest since 2002, according to Thomson Reuters data.
The currency gained more than 1.1 percent against the euro.
“We have seen a very mild recovery of the euro off its intra-day lows that might have assisted in some reprieve for the rand,” said Jana van Deventer, an economist at ETM Analytics.
“Some trades are opting to lock-in some profits following the exceptionally strong losses in the past couple of days.”
Riskier assets have come under pressure after Friday's robust US employment data increased expectations that the Federal Reserve could raise rates as soon as June - a prospect that appeared relatively remote a few weeks prior.
Renewed concern about Greece's debt talks with euro zone partners and deflationary pressures in China have also weighed on emerging markets in general.
Despite the recovery in the currency, the dollar's strength was expected to continue to exert heavy pressure on currencies across emerging markets.
“With little in the way of data today, (dollar) performance will continue to drive the (rand) and, in turn, local yields,” Barclays Africa said in a morning note.
Government bonds also recovered, with the yield for the 2026 benchmark down 8.5 basis points to 7.890 percent.
Reuters