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Johannesburg - The rand steadied against the dollar early on Wednesday, with markets waiting for the US Federal Reserve's policy statement for clues on when the Fed will hike interest rates.
The rand was also under pressure after optimism provided by a narrowing of the current account deficit in the fourth quarter of 2014 was overshadowed by signs of foreign capital flight.
READ: Current account deficit narrows as exports pick up
At 08:15 the rand was trading at R12.3735 to the dollar, not far off its Tuesday closing level of R12.3530.
"I expect a fairly muted couple of sessions before the all-important Fed meeting," Warrick Butler of Standard Bank said in a note.
"The market seems quite content to stay long of dollars ahead of the (Fed) meeting in anticipation of a statement bordering on hawkish and therefore a resumption of this strong dollar trend we have seen since the beginning of 2014."
The Fed statement is due at 20:00.
A number of strong US employment reports have increased wagers over the past few weeks on the Fed tightening as early as June and triggered a sell-off of emerging market currencies.
In local data, consumer inflation and retail sales numbers are due later in the session.
In fixed income, the yield for the 2026 benchmark was down 1.5 basis points to 7.905%.
