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Johannesburg - The rand gave up its strong gains early on Monday as momentum spurred by Moody's decision not to downgrade the country's credit rating faded, giving way to nagging concerns about the economy.
Earlier the rand had gained up to 14.7400 but retraced its steps to trade 0.44% weaker at R14.9300/$ by 09:40.
The rand had bounced back from the previous week's one-month low of 15.1800 and was on the front foot in early trade, with some traders earmarking the unit to test resistance around 14.7500 if the positive momentum held.
READ: Why Moody's affirmed SA's credit rating
The overnight rally in oil and the positive start in equities gave an early push to the rand, currency trader at Standard Bank Warrick Butler in a note.
Government bonds were firmer, with the benchmark issue due in 2026 cut 9.5 basis points to 9.035%.
"We've seen some very volatile trade this morning and it's hard to say whether the rand is being driven by flows or by sentiment," said chief trader at WWC Securities Marten Banninga.
READ: FULL STATEMENT: Moody's confirms SA's credit rating
"Some guys have read differently into the Moody's statement. Sentiment is still uncertain and the reality of a downgrade by either Fitch or S&P's is still there."
Moody's left its rating of South Africa's debt at Baa2, two levels above subinvestment grade, but assigned a negative outlook, saying that risks to implementation of structural and fiscal reforms remained a factor.
READ: SA dodges Moody's credit rating downgrade
Fitch and Standard & Poor's have the country just one notch above subinvestment grade, and are due to make their decisions in June.
The rand had firmed on Friday after weaker-than-anticipated jobs data from the United States on Friday fuelled bets that the Federal Reserve would push back an interest rate hike.
On the stock market, the Top 40 index was up 0.37% at 45 270 points.
