UPDATE: Rand firms 0.26%, breaking the R11.90/$-barrier to trade at R11.89 to the US dollar by 09:15.
By 08:47 the local unit was steady from its previous overnight close at R11.92 to the US dollar, but not before it rallied to R11.90/$ earlier in the session.
The local currency, along with most other commodity currencies, clawed back some losses as US bond yields eased somewhat after hitting four-year highs on Monday amid a global sell-off in equities, reports NKC Africa Economics.
On the South African political front, an ANC decision to postpone the State of the Nation Address heightened speculation that Zuma would be forced to step down as head of state.
TreasuryOne dealer Wichard Cilliers said the rand is enjoying the sentiment and possible inferences that could be drawn from the postponement.
"I was lucky enough to attend a function last night, where a high ranking ANC official was speaking. The ZAR had already started to move below 12.00 and he made it clear that a major announcement would be coming out regarding the political situation today," said Adam Phillips of Umkhulu Consulting.
RMB currency strategist John Cairns said the rand has ridden out the global storm with remarkable ease. “Local politics has certainly helped - rand losses would have been much sharper if the global equity sell-off had happened in November.
“But emerging markets in general held up amazingly well through the squall, a sign of investor confidence in the long-term economic and market outlook for the asset class.”
Richard Calland, an analyst at risk advisory company the Pater Noster Group, told Bloomberg his supposition is that the postponement of the National Executive Committee meeting means the core issue around Zuma’s exit has been resolved and details are now being ironed out.
Phillips said should Zuma go on Wednesday there will be a minor rally, "although any strength will need some further action being taken for the currency to run a great deal stronger".
German industrial production, UK house prices and a speech by Charles Evans from the Chicago Federal Reserve are on the economic calendar. "This means all eyes will be on South Africa today. Should an announcement come, expect some volatility," said Phillips.
TreasuryOne dealer Andre Botha echoed Phillips: "Headlines will be critical for today with the lack of data this week, and we could be in for a volatile day."
He said that market is in a very uncertain state at the moment as the VIX index, which measures fear in the market, receded to the middle 20's after reaching 50 early yesterday.* SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.