The rand was at a three-week high on Monday afternoon, where it had traded for most of the session, due to limited event risk because of the public holiday in the US.

The local unit has managed to hold onto recent gains against the dollar, which have amounted to nearly 2% in the past week, reducing its year-to-date losses to 4%.

Gains have primarily been driven by poor US macroeconomic data of late, which have cast some doubt over the US recovery.

“US economic data have been rather unimpressive this month, sparking some speculation that the steady pace of Federal Reserve tapering may be adjusted in coming FOMC (Federal open market committee) meetings,” Bidvest head currency dealer Ion de Vleeschauwer wrote in a note on Monday.

The Fed has tapered its bond-buying by $20bn so far, reducing its monthly purchases of US treasury bonds to $65bn from the initial $85bn a month that was used to spur the US economy. That stimulus also benefited emerging-market assets such as the rand as investors searched for higher returns.

If the rate of tapering was slowed, Vleeschauwer believed the rand had the potential to extend its recovery for a while, “but one should keep in mind that it has been a rather paltry rebound thus far.”

At 4.15pm, the rand was at R10.8558 to the dollar from Friday’s close of R10.8569.

Against the euro, the rand was at R14.8678 from its previous close of R14.8741 and was at R18.1487 against the pound from R18.1924 on Friday.

The euro was at $1.3697 from $1.3704 at Friday’s close.

The US equity and bond markets were shut on Monday for Presidents’ Day.