The rand retained its firmer tone in late trade on Monday amid strong commodities prices and a weaker dollar.

By 4pm the rand was bid at 7.8277 to the dollar from a previous close of 7.8954. It was bid at 12.3599 to the euro from a previous 12.4771 and at 15.6207 against sterling from 15.7403 before.

The euro was bid at US$1.5782 from US$1.5776 overnight, while gold was quoted at $930.35 a troy ounce from $927.90 overnight.

The rand shrugged off news that South Africa recorded a deficit of 1.660 billion rand for its trade with non-Southern African Customs Union trading partners in May after the R10-billion deficit in April, according to Customs & Excise figures.

A R7.1-billion deficit was expected, a survey by I-Net Bridge had found. Forecasts varied from a R6.1-billion deficit to an R11-billion deficit.

Dow Jones Newswires reports that "should credit concerns drive EUR/USD back above 1.60 accompanied by rallying commodity prices, which trades in reverse with the USD, physical intervention is likely," according to BNP Paribas forex analyst Hans Redeker.

Regardless, he adds that "upcoming weeks are likely to be volatile. On the one hand, rising interest rate and yield differentials, combined with rising swap spreads, work against the USD. On the other hand, investors might be surprised how determined the US authorities can be when it comes to the USD."

Bonds static in dead trade; eye rand

Bonds were flat on Monday as investors remained hesitant to take any large positions in the face of continuing inflation and interest rate concerns.

The credit and trade numbers on the day failed to spark any interest.

By 3.30pm the short-term government R153 bond was at 11.765 percent from its previous close of 11.735 percent, while the medium-term R157 was at 10.720 percent from a previous 10.685 percent. The long-term R186 was at 10.460 percent from a previous 10.445 percent.

I-Net Bridge