Johannesburg - South Africa's rand hovered around a three-month high against the dollar on Tuesday as emerging markets were supported by comments from the US central bank hinting at continued monetary stimulus.

By 08:59 SA time the rand traded at 10.54 per dollar, little changed from Monday's close at 10.53.

The local unit was within easy reach of Monday's high of 10.51, the strongest it has been against the greenback since January 2.

The dollar was under pressure after Federal Reserve chair Janet Yellen said “considerable” slack still existed in the US job market and further monetary stimulus could be effective in supporting the world's biggest economy.

The Fed's massive monthly asset purchases have seen billions of dollars injected into riskier, high yielding emerging markets like South Africa.

“The rand continues to push steadily stronger as sentiment towards EM revives,” said Rand Merchant Bank currency analyst John Cairns.

Government bonds edged higher on Tuesday, and yields for the benchmark 2026 paper and the 2015 note at the shorter end of the curve subsequently dipped half a basis point each to 8.405 percent and 6.8 percent respectively. - Reuters