South Africa's rand fell as much as 1.2 per cent against the dollar on Tuesday as import pressure built up after the holidays, while government bonds rallied on expectations that interest rates will be cut this month. Stocks closed slightly higher after Anglo American completed the sale of Chile-based Moly-Cop and Canada-based AltaSteel to OneSteel Ltd. The rand plumbed a session low of 6.7160 to the dollar, its weakest since December 31. It was trading at 6.6969. "The rand has weakened against the baskets ... We are seeing some people sell some rand against the crosses, probably some profit-taking," head of fixed income commodities and currencies at Absa Capital Garth Klintworth said. "The rand has performed phenomenally well in the last two weeks of December. This is probably just a healthy correction." The currency remains near three-year highs against the dollar, having gained about 10 percent in 2010. Market watchers say its strength gives the Reserve Bank scope to cut rates further on January 20, adding to the 650 basis points of cuts implemented from December 2008 to November last year. The prospect of lower rates boosted government bonds on Tuesday and inversely the yield on the 2015 bond fell 19.5 basis points to 7.255 per cent while that on the 2026 note was down by an equal margin at 8.2 per cent. "After the London holiday we've seen some emerging market funds put some money to work in South Africa," Klintworth said. On Tuesday shares of Anglo American, the biggest gainer on the local bourse, climbed 3.31 percent to 359 rand, lifting the Top-40 index of blue chips by 0.36 per cent to 28,933.58. The broader All-share index gained 0.37 percent to 32,427.40. Anglo American shares' 14-day relative strength index, or RSI, is at 70, suggesting they may be oversold. "The rest of the market was not that bullish. Basically, it's Anglo American that's keeping our market up," said Wilmar Buys, a trader at FFO Securities. In November, Anglo American announced the sale of the two assets for $932 million in debt and cash as part of a process to streamline its business. Miner Exxaro gained 3.2 per cent to 145 rand and Kumba Iron Oroe rose 2.67 per cent to 443 rand. Gold stocks were the worst performers as gold tumbled nearly 2 per cent . Shares in Harmony Gold dropped 3.03 per cent to 81.50 rand, and AngloGold Ashanti lost 4.26 per cent to 315 rand.