Johannesburg - South Africa's rand recovered against the dollar early on Tuesday, after slumping to a two-month low due to a stronger greenback in the wake of Donald Trump's victory in the US presidential election.
At 0746 GMT, the rand traded at 14.2350 per dollar, 1.27 percent firmer than Monday's close of 14.4175.
The rand hit a session low of 14.5125/dollar on Monday, its weakest level since Sept. 13, according to Thomson Reuters data, tumbling alongside currencies in emerging market peers on growing bets that Trump will ramp up spending to boost growth in the world's largest economy.
“The time is just right for a correction on emerging market currencies because these currencies have sold off very aggressively in the past week and the sell-off is not necessarily a true reflection of underlying fundamentals for these currencies,” ETM Analytics market analyst Jana van Deventer said.
The dollar has strengthened as investors brace for stronger inflation in the United States amid expectations of expansionary fiscal polices under Trump's presidency.
Dollar strength and rising US yields have fuelled capital outflows from emerging markets.
Government bonds also firmed, and the yield for the benchmark instrument due in 2026 fell 12 basis points to 9.095 percent.
The stock market also recovered, with the Top-40 index inching 0.25 percent higher while the broader all-share added 0.33 percent.
REUTERS