The South African rand was flat in early trade on Thursday, as global investors avoided taking large positions while digesting a surprise US Treasury announcement aimed at supporting the bond market.

At 0658 GMT the rand traded at 16.09 against the dollar, unchanged from its previous close.

Umkhulu Treasury's Adam Phillips said he expected the currency to remain rangebound for the rest of the week. "If it can close below 16.1470 on Friday, then it might push stronger," he said.

Like other risk-sensitive currencies, the rand often takes its cues from global developments when there is little domestic economic data on the calendar.

The US dollar weakened against a basket of currencies after the US Treasury Department said it would double buyback operations for longer-dated government bonds to support market liquidity.

The announcement came after a major bond selloff as investors demanded higher returns on the back of increased inflationary risks stemming from the US-Israeli war on Iran.

ETM Analytics said the move had improved global risk appetite and boosted demand for higher-yielding assets, including South African bonds.

South Africa's benchmark 2035 government bond was steady in early deals, as the yield fell half a basis point to 8.465%.