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Johannesburg - The rand recouped 2% against the dollar on Monday, as exporters sold the US currency and some investors cautiously emerged from the sidelines after weeks of volatile trade.
Rand trading has been marked by volatility over the past three weeks, compounded by thin volumes as some players, spooked by its wide gyrations, stayed on the sidelines as they wait for the currency to stabilise.
"Liquidity is pretty poor at the moment and with that the rand can move 3 or 4 cents just on any kind of flows," Standard Bank trader Warrick Butler said.
The currency has lost as much as 22% since the beginning of September and as a heavily traded currency globally, it remains vulnerable to any turns in portfolio flows.
The rand has been on a reversal trend since hitting 28-month lows of 8.4950 against the dollar on Thursday.
It was trading at 7.9690 to the dollar at 11:40, 1.86% firmer than Friday's New York close of 8.12.
Bonds also gained. The yield on the 2015 paper fell 21 basis points to 6.93% and the 2026 yield was down 22.5 basis points to 8.445%.
"Traders are just getting back into South African assets after the sharp falls seen recently, covering some shorts in case the eurozone comes up with a cure-all for the debt crisis," said Christopher Shiells, emerging markets analyst at IGM.
The rand also took its cue from the euro, which pared losses against the greenback, as traders cited media reports that the European Central Bank may consider more measures to support the economy.
An improving appetite for risk and exporter selling of the dollar was helping to underpin the rand, said Brigid Taylor, head of institutional sales at Nedbank.
Rand trading has been marked by volatility over the past three weeks, compounded by thin volumes as some players, spooked by its wide gyrations, stayed on the sidelines as they wait for the currency to stabilise.
"Liquidity is pretty poor at the moment and with that the rand can move 3 or 4 cents just on any kind of flows," Standard Bank trader Warrick Butler said.
The currency has lost as much as 22% since the beginning of September and as a heavily traded currency globally, it remains vulnerable to any turns in portfolio flows.
The rand has been on a reversal trend since hitting 28-month lows of 8.4950 against the dollar on Thursday.
It was trading at 7.9690 to the dollar at 11:40, 1.86% firmer than Friday's New York close of 8.12.
Bonds also gained. The yield on the 2015 paper fell 21 basis points to 6.93% and the 2026 yield was down 22.5 basis points to 8.445%.
"Traders are just getting back into South African assets after the sharp falls seen recently, covering some shorts in case the eurozone comes up with a cure-all for the debt crisis," said Christopher Shiells, emerging markets analyst at IGM.
The rand also took its cue from the euro, which pared losses against the greenback, as traders cited media reports that the European Central Bank may consider more measures to support the economy.
An improving appetite for risk and exporter selling of the dollar was helping to underpin the rand, said Brigid Taylor, head of institutional sales at Nedbank.
