Stocks were little changed with JSE-listed Steinhoff shares weighing on the market.
At 4.30pm, the rand was up 0.28% to R12.35 against the dollar from a close of R12.38 overnight in New York. By 5pm, the rand bid at R12.4256 to the greenback, about 1 cent softer than at the same time on Monday.
The currency reached R12.2775, gaining around 1%, earlier in the session.
“The Zuma trigger today (yesterday) gives a glimpse of how the rand will react if Zuma does step down early, although this possibility is increasingly being priced in,” said Christopher Shiells, a senior emerging market analyst at Informa Global Markets.
On Sunday parliament said it would meet this week and review its rules relating to removing the country’s president, after the constitutional court said on December29 lawmakers had previously failed to hold Zuma to account, further fuelling rumours of an early exit for the 75-year-old leader .
The ANC’s top decision makers also meet this week, and Zuma’s recall is expected to be on the agenda.
The rand has gained around 8% as investors bet Deputy President Cyril Ramaphosa’s election as leader of the ANC would push through business-friendly policies.
“We believe that the rand’s rally is looking overstretched given that South Africa’s idiosyncratic risks did not end with Ramaphosa’s victory. It is for this reason that we are maintaining a cautious stance on the rand and government bonds for 2018,” Shiells said.
On the bourse, the benchmark JSE Top40 index rose 0.1% to 53184.36 points and the all share index gained 0.13% to 60113.65 points.
Steinhoff retreated 13.02% to R7.55 after the European Central Bank said on Monday it had sold its bonds of the scandal-hit company, potentially suffering a loss of up to 55% on that investment.
Gold Fields lost 3.08% to R52 and AngloGold Ashanti was 2.34% lower at R128.83.