At 1604 GMT, the rand traded at 16.4650 against the dollar, 0.81% stronger than its previous close.
The dollar was down about 0.66% against a basket of currencies as investors ramped up bets that the Fed's aggressive policy would tip the U.S. economy into recession.
The rand is highly susceptible to shifts in global market sentiment and changes in the outlook for U.S. monetary policy.
This week the domestic data calendar features purchasing managers index surveys for the manufacturing sector and whole economy. Investors will also monitor debates within the governing African National Congress (ANC) over the role of the central bank.
An ANC policy conference at the weekend included discussions over whether to expand the South African Reserve Bank's mandate beyond price stability, and delegates made a renewed commitment to nationalise the bank.
"The rand will remain heavily dependent on the global market environment, but the past few days have seen some small, positive outcomes, which has allowed the domestic currency to strengthen," Investec analyst Annabel Bishop said in a research note.
Stocks on the Johannesburg Stock Exchange ended slightly lower in the absence of major catalysts, with the benchmark all-share index closing down 0.42% at 68,643 points, while the blue-chip index of top 40 companies ended 0.51% lower at 62,155 points.
The South African government's benchmark 2030 bond rose slightly, with the yield down 3.5 basis points to 10.445%.
(Reporting by Alexander Winning and Bhargav Acharya; Editing by Kirsten Donovan and David Holmes)
