JOHANNESBURG: South Africa's rand gained on Tuesday supported by better-than-expected fourth quarter economic growth numbers but traders remained cautious ahead of a budget speech the next day.
At 1501 GMT the rand was trading 0.41 percent stronger at 11.6000 to the dollar. The currency gained 0.58 percent against the euro at 13.1028.
South Africa's GDP expanded above forecasts by an annualised 4.1 percent quarter-on-quarter in the fourth quarter of 2014, Statistics South Africa said.
"The rand has done reasonably well today due to the slightly better GDP numbers but we are not out of the woods yet in terms of the rand making a turn around," said Ion de Vleeschauwer, a currency dealer at Bidvest Bank.
"It's all going to be dependent on what is said from the Fed on what they intend to do with the interest rates and from the (local) budget. That is very much on traders mind."
Federal Reserve Chair Janet Yellen is expected to face pointed questions this week from U.S. lawmakers aimed at revealing details about the Fed's timing on interest rate hikes, as well as fresh scrutiny about transparency at the central bank.
Finance Minister Nhlanhla Nene presents the national budget to parliament on Wednesday, with economists polled by Reuters expecting him to keep his budget deficit target unchanged from October forecasts.
In fixed income, the yield on the benchmark government bond maturing in 2026 was down 2.5 basis points to 7.655 percent.
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