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Johannesburg - The rand weakened against the dollar on Tuesday, pulling back slightly from a three-month high as momentum slowed as the unit tracked the euro currency.
At 15:45 GMT, the rand was down 0.3% to the dollar at R10.5650, compared with a R10.5330/$ close in New York on Monday.
The rand lacked momentum to drive it through Monday's level of R10.5110/$, which was triggered after US Federal Reserve chairperson Janet Yellen said "considerable" slack still existed in the US job market and further monetary stimulus could be effective in supporting the world's biggest economy.
The rand was expected to trade in recent ranges until later in the week.
"With euro/dollar stuck in a relatively tight range, and the dollar index lacking any upside momentum above 80.20/5, its difficult to expect strong dollar/rand rebounds without an external or domestic trigger," said Anisha Arora, emerging market analyst at 4Cast.
The rand needs to break through R10.50/$ to open up further gains, but forecasts of upbeat US jobs data later in the week pose a risk.
Government bond yields hit their highest in the session after weaker-than-expected demand at an auction of the 2023, 2031 and 2041 paper.
The 2026 yield hit a session high of 8.515% after the auction, while the 2015 yield rose to 6.86%.
By late afternoon trade the 2026 note had recovered slightly to 8.485% and the 2015 paper to 6.795%.
"Market talk is that secondary interest had fallen away, with rate hike risk still prevalent amid yields that had fallen to unattractive levels," market analysts at Tradition Analytics said in an afternoon note.
Last week the central bank left interest rates steady at 5.5% but hinted at imminent hikes to help rein in inflation pushed higher by a weaker rand.
At 15:45 GMT, the rand was down 0.3% to the dollar at R10.5650, compared with a R10.5330/$ close in New York on Monday.
The rand lacked momentum to drive it through Monday's level of R10.5110/$, which was triggered after US Federal Reserve chairperson Janet Yellen said "considerable" slack still existed in the US job market and further monetary stimulus could be effective in supporting the world's biggest economy.
The rand was expected to trade in recent ranges until later in the week.
"With euro/dollar stuck in a relatively tight range, and the dollar index lacking any upside momentum above 80.20/5, its difficult to expect strong dollar/rand rebounds without an external or domestic trigger," said Anisha Arora, emerging market analyst at 4Cast.
The rand needs to break through R10.50/$ to open up further gains, but forecasts of upbeat US jobs data later in the week pose a risk.
Government bond yields hit their highest in the session after weaker-than-expected demand at an auction of the 2023, 2031 and 2041 paper.
The 2026 yield hit a session high of 8.515% after the auction, while the 2015 yield rose to 6.86%.
By late afternoon trade the 2026 note had recovered slightly to 8.485% and the 2015 paper to 6.795%.
"Market talk is that secondary interest had fallen away, with rate hike risk still prevalent amid yields that had fallen to unattractive levels," market analysts at Tradition Analytics said in an afternoon note.
Last week the central bank left interest rates steady at 5.5% but hinted at imminent hikes to help rein in inflation pushed higher by a weaker rand.
