The rand weakened in early trade on Tuesday as caution prevailed ahead of a closely watched testimony by top US policymakers, with investors looking out for comments on the rise of bond yields.
At 0625 GMT, the rand traded at 14.8200 versus the dollar, 0.68 percent weaker than its previous close. South African markets were closed for a public holiday on Monday.
The rand had tumbled about 1 percent in early trade on spillover from the Turkish lira’s tumble on Monday, but the local currency pared losses later as the US dollar gave up its gains.
The market’s immediate focus remained on the Congressional testimony by US Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen later in the day.
“We kick off the week with market participants looking for signs from policy makers on whether they will intervene in the bond market at all, and how long they will tolerate a rise in yields,” said Bianca Botes, executive director at Citadel Global.
Investors fear that a sharp run-up in US Treasury yields since mid-February could lead the Fed to allow lending rates to rise, which could draw money away from high-yielding, but risky currencies like the rand.
In fixed income, the yield on the government bond due in 2030 was flat at 9.335 percent