At 1530 GMT, the rand was around 0.4% firmer at 16.1500 per dollar, after touching a new one-month high earlier in the session.
"This is very much a sign of dollar weakness in the wake of rising infection rates rather than rand strength," analysts at Rand Merchant Bank said in a research note to clients.
Market attention will shift to South Africa's mid-term budget on Wednesday, when Finance Minister Tito Mboweni will lay out spending priorities in Africa's most industrialised economy.
A poll published by Reuters last week predicted Mboweni would announce a wider deficit than projected in June's emergency COVID-19 budget, as a third-quarter rebound in economic growth would not boost tax receipts sufficiently.
Mboweni is also expected to unveil more bailouts to ailing state-owned companies like South African Airways, which have put public finances under strain for many years.
Despite helping the rand, uncertainty over the U.S. election and rising coronavirus cases hurt Johannesburg-listed stocks.
The All-share index fell 1.48% to 54,079 points, pushing it back to a level seen on Oct. 2. The blue-chip Top-40 index shed 1.44% to close at 49,560 points.
The broad-based slump was led by South African petrochemicals major Sasol, which fell by over 10%, while mining stocks pushed the resources index down 3.24%.
Index heavyweight Naspers, however, was up 1.6% as tech stocks advanced globally.
(Reporting by Alexander Winning and Promit Mukherjee; Editing by Susan Fenton)
