Dealers said the currency was going through a natural pull-back from oversold levels at 8.71 last week but would be likely to encounter resistance at 8.30.

The rand was up 0.8 percent at 8.3685 to the dollar at 0605 GMT, off a 8.4350 close in New York on Tuesday.

"We are pleased with the brief retracement we have seen - it's a long time overdue. Look to accumulate on the dips as the global backdrop has not really improved," said Brigid Taylor from Nedbank.

 Investors' fears about holding risky assets in the global environment have decreased slightly but they are still buying heavily into safe havens such as US Treasuries, dealers said.

"For now the rand remains open up to 8.60 with support at 8.23," Taylor added.

Investors will focus on Wednesday on a European Central Bank rate decision. It is expected to hold back from policy moves but may indicate a readiness to cut interest rates as early as next month.

The spread differential between the South African benchmark government 2026 and 2015 bonds was at a record 206 basis points even though bond yields were little-moved in early trade, as investors fretted about oversupply.

Government will announce issuance plans for next week's fixed income auction and in the next session indicate which bonds it may switch next Thursday.

"Most of the action is in the front end, the long end is lagging due to auction concerns. We're still waiting for the switch auction announcement next week, its quite a heavy schedule for the market to absorb," a local dealer said.