South Africa's rand gave back some of the previous day's gains on Thursday as investors fretted about whether President Jacob Zuma would hit the right notes in a speech on the state of the economy.

At 0709 GMT, the rand traded at 15.9150 versus the dollar, down slightly from Wednesday's New York at 15.8950.

The rand had rallied to 15.7650 in the previous session after the Federal Reserve left some investors betting that the next U.S. rate hike might be a while; a plus for riskier, but high yielding emerging market currencies.

The rand however remains on shaky ground after shedding a quarter of its value against the greenback last year, its decline accelerating in December after a cabinet reshuffle in which Zuma changed finance ministers twice in less than a week.

Ratings agencies have warned of a downgrade for Africa's most industrialised economy should signs start emerging of a shift from relatively prudent fiscal policies.

"President Zuma’s state of the nation address tonight is key," Barclays Africa said in a note.

On the stock market, the Top-40 index was down 0.6 percent while the broader all-share slipped 0.34 in early trade.

Government bonds however held firm, and the yield for the benchmark instrument due in 2026 eased 3 basis points to 9.185 percent.