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JOHANNESBURG, June 1 (Reuters) - The South African rand recovered from a record low hit earlier on Thursday, following a hammering in May on the back of souring investor sentiment.
At 1538 GMT, the rand traded at 19.5925 , up 0.66% from its previous close. It fell to its lowest level of 19.9075 against the U.S. dollar earlier in the day.
"The rand remains entrenched in the R19.50/R20.00 range, but short-term risks remain for a breach of the R20.00 level as investor outflows continue and exporter inflows remain limited," Andre Cilliers, Currency Strategist at TreasuryONE, said.
Worsening rolling blackouts and U.S. allegations that South Africa had supplied arms to Russia last year have left a sour taste in investors' mouths.
This sent the currency into a tailspin in May where it lost more than 7% against the greenback.
The dollar was last trading 0.48% lower against a basket of global currencies.
Investors were relieved when, overnight, the U.S. House of Representatives passed a bill to suspend the $31.4 trillion debt ceiling. Failure to pass could have tipped the world's biggest economy into a recession.
The bill is now headed to the Senate where the legislation could be enacted before the weekend.
"While the... U.S. debt ceiling bill may shortly pass (lifting risk appetite and helping the dollar to retreat), there is limited clarity regarding a quick resolution of domestic factors to support the rand," said Jason Swartz, portfolio manager at Old Mutual Investment Group.
Locally, the Absa Purchasing Managers' Index (PMI) survey showed manufacturing activity contracted for a fourth consecutive month in May.
Shares on the Johannesburg Stock Exchange rose, with the blue-chip Top-40 (.JTOPI) index and the broader all-share (.JALSH) index both closing almost 1% higher.
South Africa's benchmark 2030 government bond also rose, pushing the yield down 6 basis points to 11.240%.
