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The rand broke through R12.30 to the US dollar on Friday in an erratic trading week where the local unit reached a 4-month high and low in a matter of days.
The volatility was driven by geopolitical tension, which eased later in the week.
"The range on the local currency saw a massive widening spreading from R12.30/$ to R12.75/$ by Thursday afternoon,"commented Peregrine's Bianca Botes.
On Friday the rand resumed its run in line with a rise in other emerging market currencies following the release of weak US inflation data.
US core CPI came in at 2.1% for April, unchanged from the previous month and lower than market predictions, fueling expectations that the Federal Reserve is likely to continue with gradual policy normalisation.
"Emerging market (EM) currencies were in recovery mode on Thursday as the dollar weakened, following the disappointing inflation data. The Russian rouble gained the most followed by the rand, appreciating as much as 2.4% and 2.0% against the greenback," said RMB strategist Mpho Tsebe.
On Friday, the rand gained 0.23% to trade at R12.27/$ by 10:57. The unit opened trading flat at R12.30 from its overnight close in New York.
"While markets were rife with speculation that the funds from a Naspers deal were flowing to SA and distorting the market, little evidence was found to back that theory," said Botes.
Naspers bolstered its cash war chest with another R27.7bn when it sold its entire 11.18% stake in India’s largest e-commerce marketplace, Flipkart, to Walmart.
President Donald Trump's follow-through on withdrawing from the Iran weapons deal earlier in the week, shocked the global economy and sent emerging market currencies tumbling, but by Thursday the tensions eased and EMs staged a comeback.
"While the rand is trading at its strongest levels in weeks, one should not miss the opportunity of such resilience to cover open exposure, as the euphoria is not expected to last," said Botes.
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