But with no complete resolution yet in sight, the global outlook remains uncertain and the rally could be short lived.

The rand hovered above its next resistance level, trading at 8.31 to the dollar by 0600 GMT. It tested 8.30 resistance, which may open up 8.28, dealers said.

Central bank data showed reserves fell to $47.672 billion in May, likely due to the stronger dollar last month.

Yields on government bonds were down with the firmer currency but may moderate with the announcement of Treasury's switch auction plans for next week.

The 2015 yield dipped 1.5 basis points to 6.255 percent while the 2026 issue dropped three basis points to 8.26 percent.

The R186/R157 spread was down to 202 basis points by 0640 GMT, off a record 206 hit this week.

"The market saw opportune value buying of duration yesterday flattening the curve back to 202 basis points," said Brigid Taylor of Nedbank.

Taylor added the rally would probably not last because investors were still long on the 2015 bonds from the past two switch auctions.

Treasury announced last week it would be hold weekly switch auctions this year, increasing issuance that is likely to keep the rally contained.

Business confidence, the Reuters Econometer and manufacturing production are expected later in the session, with economists forecasting manufacturing will have recovered from its surprising 2.7 percent contraction last month.