JOHANNESBURG: South Africa's rand firmed in early trade on Thursday, as optimism that the new U.S. administration will unveil massive stimulus package to bolster growth boosted demand for riskier but higher-yielding currencies.

At 0630 GMT, the rand traded at 14.8775 versus the dollar, 0.15% firmer than its previous close.

"Risk-on environment continues to favour rand," said Bianca Botes, executive director at Peregrine Treasury Solutions in Pretoria. "The rand held steady overnight, as optimism around stimulus remains high."

Riskier currencies were supported after Joe Biden, who has laid out plans for a $1.9 trillion pandemic relief package, was sworn in as U.S. president.

Market participants are also keeping a close tab on the South African Reserve Bank monetary policy decision due later in the session.

Most economists expect the repo rate to be held at 3.5% though a minority predict a rate cut.

In fixed income, the yield on the benchmark government bond due in 2030 dipped one basis point to 8.745% in early deals.