JOHANNESBURG: South Africa's rand reversed earlier losses against the dollar on Tuesday, helped mainly by the greenback's weakness in the wake of data that undermined the case for a U.S. rate hike.
Stocks were slightly up, but gains were capped by low volumes as traders prepared for a mid-week holiday.
Having earlier hit a session low of 14.5350/dollar, the rand clawed its way back to 14.3940 by 1530 GMT, up 0.4 percent from Monday's New York close at 14.4510.
The rand's gains reflected general dollar weakness after weaker-than-expected U.S. economic data reinforced views that the Federal Reserve would take a dovish stance in a policy statement on Wednesday.
"Everything is stronger versus the dollar this afternoon," IGM analyst Christopher Shiells said.
"The dollar had strengthened before all of this on expectations the Fed may be a bit more hawkish, but this was perhaps overplayed and the emerging market rally is back on.
Tuesday trade was affected by thin liquidity ahead of a national holiday which would see South African financial markets closed on Wednesday, Johannesburg-based forex dealers said.
Government bonds also ticked higher, with the 2026 benchmark dipping 1 basis point to end the day at 9.115 percent.
After a volatile session on the bourse, the benchmark Top-40 index closed 0.24 percent higher at 46,695.33 points while the broader All-Share index gained 0.15 percent to 53,062.95.
Supermarket operator Pick n Pay was up 2.03 percent at 70.90 rand after it reported a 26.4 percent rise in headline earnings per share and said it planned to expand into Nigeria.
Shares in information technology company Datatec slumped 12.92 percent to 44.90 rand, making it the biggest decliner among the broader All-Share index after it flagged lower profit for 2016.
Volumes were relatively low, with around 181 million shares changing hands compared to last year's daily average of around 290 million.
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