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Johannesburg - The rand rallied against the dollar on Thursday as a statement by the US central bank signalling interest rates would remain near zero offered respite to struggling emerging market currencies.
Sharp volatility in the past two sessions due to a public holiday and the Russian rouble's dramatic nosedive on Tuesday had seen the local unit test six-year lows, threatening to move out of a recent range and hold beyond R11.8000 mark.
READ: Putin and the rouble rout
By 08:09, the rand had firmed 0.12% to R11.5965 per dollar after closing at R11.6100 overnight, a good distance from its week-high of R11.8125.
Yields on local bonds also recovered as investor flight from emerging market assets was stemmed by the Russian central bank's interventions to steady the rouble.
READ: Rouble crisis could shake Putin's grip
The benchmark local issue due in 2026 shed 10 basis points to 8.01% in early trade.
On Wednesday evening, Janet Yellen, chair of the US Federal Reserve, said she would take a "patient" approach in deciding when to bump borrowing costs higher, allaying market suspicions of a hike before June 2015.
READ: US consumer prices fall on looming rate hike
"Some relief to growth assets was seen in the knowledge that the hikes were not imminent and that the Fed was not rushing to tighten in increasingly uncertain global conditions," economists from ETM Analytics said in a market note.
However, the analysts said the dollar would continue its strong run and the rand would remain under pressure.
Locally, Statistics SA publishes producer price inflation for November at 11:30, with a Reuters poll expecting the figure to slow to 6.5% as falling oil softens input costs.
