The rand weakened in midday trade yesterday to its worst in nearly three weeks after the ANC said an early exit for President Jacob Zuma had not been discussed at a party meeting.

Initially hit by softening demand for emerging market assets as global bond yields picked up, the rand’s losses accelerated to a session-low R12.55 shortly after the ANC Secretary-General Ace Magashule told reporters Zuma’s removal was not on the agenda of a meeting of the party’s top decision-making body.

At 1pm the rand was 1.4% weaker at R12.5075 to the dollar, slightly better than the slide to its weakest level since December26.

By 5pm, the rand had recovered somewhat, bidding at R12.4529 to the greenback, but 2.73c softer than at the same time on Tuesday.

The rand has swung between R12.2275 and the upper R12.50s for the first two weeks of the year, pushed and pulled by mostly rumour-fuelled bets of a Zuma resignation before his term ends next year.

“The rand, and markets generally, at the moment have been very headline driven. And the ANC meeting only ends tomorrow so there will be more headlines and that means rand volatility should continue,” said trader at RMB, Jim Bryson.

“It’s really difficult to call, it needs to close above (R)12.52 to get out of these ranges, but a test of around (R)12.20 cannot be totally discounted,” Bryson said.

The rand has rallied since mid-December, supported by investors’ hopes that the newly elected leader ANC head Cyril Ramaphosa would push through business-friendly policies.

The rally has since stalled, with signs of higher rates in the US shifting some of the focus back to fundamentals, although analysts said a decision on Zuma remained the main swing factor.

“He (Ramaphosa) is likely to do everything in his power to reduce Zuma’s influence and to facilitate a rapid end to his time in power. That is rand positive,” said analyst at Frankfurt-based Commerzbank, Elisabeth Andreae.

Meanwhile, in equities, the benchmark JSE Top40 index slipped 0.03% to 53167.96 points while the broader all share index declined 0.22% to close at 59979.63 points.