Rand holds on to gains, stocks seen flat

South Africa's rand strengthened on Monday along with other emerging-market currencies after softer-than-expected employment data from the United States decreased bets of a rate hike by the Federal Reserve.

At 0645 GMT the rand had firmed 0.29 percent to 15.9850 per dollar, managing a third straight session below the crucial 16.00 mark as it consolidated recent gains.

The rand has gained more than 5 percent against the dollar in last two weeks since slumping to an all-time low of 17.9950 on Jan. 11.

Bonds were weaker in early trade, with the benchmark paper due in 2026 adding 4.5 basis points to 9.215 percent.

Nonfarm payrolls in the United States increased by just 151,000 jobs last month, data showed on Friday, well short of expectations for a rise of 190,000, prompting some investors to push back bets rate hikes by the Federal Reserve to later in 2016.

The rand would, however, battle for clear direction in the week, traders said, with most Asian financial markets closed for the Lunar New Year holidays and a dearth of data releases locally.

President Jacob Zuma's state of the nation address on Thursday would be closely watched for clues on the government's plan to rescue the ailing economy.

"The bigger question is whether we get any hints of what the budget will look like and so whether a rating downgrade can be avoided," said Rand Merchant Bank currency strategist John Cairns.