The rand rose on Tuesday as the dollar fell after US President Donald Trump fired Secretary of State Rex Tillerson, while stocks weakened.
At 1530 GMT, the rand traded at 11.78 per dollar, 0.36% firmer than its Monday close.
Trump said on Twitter he was replacing Tillerson with Mike Pompeo, the director of the Central Intelligence Agency (CIA), and that Gina Haspel would take over from Pompeo.
The dollar was also held down by news of slowing US inflation, suggesting that the Federal Reserve remained on track to raise interest rates at a gradual pace.
The rand barely reacted to local data showing manufacturing output rose 2.5% in January, supporting market views that the domestic economy retained momentum at the start of the year.
The currency has largely stayed at elevated levels in recent months, buoyed by expectations of faster economic growth under South Africa’s new political leadership.
“Hopes for a political change have been spurring the rand higher since November. However, the air should be getting thinner for further surges of the rand as the new government will have to ‘deliver’ now,” Commerzbank analysts wrote in a note.
“We expect a moderate rand depreciation trend in the coming months”.
In fixed income, the yield for the benchmark government bond due in 2026 rose 3 basis points to 8.095%, reflecting weaker bond prices.
In the equities market, stocks were a little volatile on the day, often changing from red to black and red again as they tried to find a fresh catalysts.
The Johannesburg-All Share index fell 0.19% to 59 084 points, while the Top 40 Index edged down 0.13% to 52 371 points.
Crisis-hit South African retailer Steinhoff closed down 3.41% to R4.25 after it said it has sold its 17% stake in KAP Industrial for R3.66 billion, another step in its efforts to shore up its finances and pay down debt.
KAP shares fell as much as 4% before recovering to close slightly up 0.47% to R8.54.
“The market was thinking that they would sell their whole stake. Maybe the market takes it as a positive,” said Cratos Capital trader Greg Davies.
Still reeling from a move by US President Donald Trump to impose tariffs on US metal imports, steel maker ArcelorMittal South Africa fell 9.47% to R2.58.