Cape Town - The rand firmed more than 10 cents since opening on Thursday morning amid increasing investor appetite for emerging markets.
By 11:25 the local unit was trading at R13.16 to the greenback, 0.85% firmer than its overnight close in New York.
"In the early morning trade, a level of 13.28 held firm resistance," said TreasuryOne dealer Andre Botha. "This accompanies the resilience shown by emerging markets this morning where Asian stocks erased early losses and ended higher.
"The trend in the markets seems to be favouring the emerging markets with the rand, along with its peers, trading stronger.
"We could look at a possible level of R13.15 today," he said in an early morning note to clients.
The rand strength comes as Finance Minister Malusi Gigaba started his maiden voyage to the US to reclaim global confidence following President Jacob Zuma's midnight Cabinet reshuffle on March 31, which saw the axe falling on former finance minister Pravin Gordhan and his deputy Mcebisi Jonas.
The move took the rand from a near two-year low of R12.31 to R13.16 currently and triggered credit downgrades to junk status from both S&P Global Ratings and Fitch. Moody's, who has South Africa on two notches above junk, has placed the country on downgrade review.
GRAPH: Intraday movements of the rand vs dollar on Wednesday and Thursday
Gigaba, who declared the government's commitment to growth, poverty alleviation and a speedy reform of state-owned enterprises at a media briefing on Wednesday, plans to meet with officials of the World Bank and the IMF as well as representatives of Moody's to convince them not to downgrade South Africa.
The finance minister also confirmed that the nationalisation of banks and mines is not ANC policy, following a heated debate sparked by a column published in the Sunday Times by Gigaba's adviser Chris Malikane.
Wednesday also saw inflation figures for March coming out at a better-than-expected 6.1% year-on-year from 6.3% in February.
The rand was flirting with R14/$ following the Fitch downgrade.
"It is too early to say that the market has found a new post-downgrade level," said RMB currency strategist John Cairns in his morning note to clients.
He said global short-term pressures on the rand have eased.
"The sharp dollar weakness of early week has abated, and even partly reversed on dovish ECB (European Central Bank) speak. Concerns remain high over Sunday’s French election and North Korea but are no longer contributing to further safe-haven buying."
Cairns also warned that S&P's warning that it could cut SA’s rating deeper into junk territory if there is no improvement in economic growth and economic policy should be taken seriously.
"As we keep pointing out, the growth outlook for the next few years has deteriorated. Junk status on foreign currency debt is bad enough but further downgrades would imply loss of investment grade on local currency debt - a much bigger issue entirely," he said.
He said capital inflows, the key reason why the rand has held up so well, continue but in much smaller volumes.Read Fin24's top stories trending on Twitter: