The rand has recovered all the ground it lost over the past ten days, to trade at R19.2748/$ on Monday afternoon.

The rand suffered a flash crash following the SA Reserve Bank’s monetary policy committee meeting on 26 May. The currency lost 30c of its value in the minutes following the SARB’s briefing, as traders digested governor Lesetja Kganyago’s less hawkish tone about future rate hikes – along with the economic impact of another large 50 basis-point rate hike.

Then on Thursday last week, the rand hit a record low of R19.91 after South Africa’s decision to provide diplomatic immunity to Russian delegates (potentially including President Vladimir Putin) at the BRICS summit in August. The SA Reserve Bank’s warning about the potential threat of sanctions also weighed on the rand.

By Monday afternoon, it erased all the losses since the MPC meeting.

But it is still worth 6% – almost a full rand – less against the dollar since the US accusation that Russia received arms in South Africa. Before the allegations, the rand was trading at R18.33.

The rand strength on Monday came as the dollar edged up against major peers on Monday, as markets priced in around a one-in-four chance of the US Federal Reserve raising benchmark rates this month after robust jobs data on Friday.

The dollar index – which tracks the greenback against six peers – came off the boil last week, after some Fed officials voiced a preference for a pause in rate hikes and after a breakthrough in US debt ceiling talks calmed market jitters.

Despite a surprisingly high payroll figure for May, indicating the US economy may still be running hot, analysts said the Fed may still have scope to pause rate rises as wage pressures eased and unemployment rose from a 53-year low.

Markets now put the probability of a 25 basis point hike at the meeting on June 13-14 at 27%, down from two-in-three odds a week earlier.

The dollar index was last up 0.1% on the day at 104.260.

US services data due later on Monday could give further clues, though analysts said core inflation data due next week was more likely to move the needle.

“…the lack of other key inputs before next week’s CPI [inflation data] could keep the dollar capped,” currency analysts at ING said in a note.

“We think that, when adding the cooling off in wage inflation, and considering the diverging views within the FOMC (Federal Open Market Committee), the case for a pause at the 14 June meeting should prevail.”

The euro slipped 0.1% to $1.06930, extending the previous session’s 0.5% slide, with markets looking ahead to European Central Bank chief Christine Lagarde addressing a hearing in the European Parliament later on Monday.

The dollar gained 0.3% versus the yen at 140.340.

The Australian dollar dipped 0.3% to $0.65870, ahead of a decision by the central bank on Tuesday on whether to raise rates that analysts said was on a knife-edge.

Meanwhile, the Turkish lira dropped more than 1%, continuing its slide since President Tayyip Erdogan’s re-election.

The fall came despite the appointment of Mehmet Simsek as Turkey’s finance minister, who won markets’ confidence during previous stints in government between 2009 and 2018.