The South African rand recovered early on Tuesday, as the dollar pulled back from a two-decade peak amid fears that aggressive interest rate hikes by the Federal Reserve would push the US economy into recession.

At 0632 GMT, the rand traded at 15.9900 against the dollar, 0.87% stronger than its previous close.

The dollar index, which measures the greenback against a basket of six major peers, was trading at 104.95, below a 20-year peak of 105.29 struck on Monday.

“While the broader bullish bias remains intact, the topside bias in the USD has stalled this morning, providing some temporary breathing room for battered currency markets,” ETM Analytics said in a research note.

South African rand slips to almost four-week low

The Fed is scheduled to make its next policy announcement on Wednesday and investors will be highly focused on signals about the pace and scale of future rate hikes.

The government’s benchmark 2030 bond firmed slightly in early deals, with the yield down 2.5 basis points to 10.425%.