The dollar fell sharply due to agreements that the largest U.S. bank failure would encourage the Federal Reserve to slow the pace of interest rate hikes since the 2008 financial crisis. The South African rand thus strengthened in the first few trades on Monday.

The rand traded at 18.1875 against the dollar at 06:35 GMT, about 0.8% firmer than its previous close. The dollar was down 0.3% against a basket of global currencies. After the sudden collapse of Silicon Valley Bank, investors are speculating that the Fed would no longer raise rates by 50 basis points this month. The rand should be inspired by the movements of the dollar as no major economic data is expected for South Africa on Monday.