South Africa’s rand relinquished some ground against the dollar on Tuesday after strong gains in the previous session, with traders expecting it to take its cue mainly from global market moves for most of the session.
At 07:06 GMT the local unit traded at 12.0100 to the greenback, down slightly from its New York close of 11.9980 on Monday.
The local unit had pushed to 11.9520 on Monday, a market holiday in South Africa, reaching its strongest in more than a week.
The gains were mainly driven by a stronger euro which was boosted by renewed optimism of a solution to Greece’s debt problems.
“Greece accounts for the change in the rand outlook. Whereas last week it seemed we were set for another default, this week it’s all about compromise,” RMB currency analyst John Cairns said.
Government bonds extended previous gains, with the yield on the benchmark instrument maturing in 2026 easing 6 basis points to 7.98 percent.
Traders and analysts said the market was mainly focused on the Federal Reserve’s meeting on Thursday for clues on the timing of interest rate hikes in the United States.