The rand was steady with a slightly firmer bias in noon trade on Wednesday as the recent dollar rally began to run out of steam and commodity prices recovered.

By 11.40am the rand was bid at 7.7380 to the dollar from a previous close of 7.7501. It was bid at 11.4060 to the euro from a previous 11.4219 and at 14.3988 against sterling from 14.4894 before.

The euro was bid at US$1.4715 from US$1.4782 overnight, while gold was quoted at $806.75 a troy ounce from $813.40 overnight.

RMB analysts said in their morning report that despite US PPI inflation coming in at 9.8 percent, the USD rally has lost momentum. The EUR/USD failed to move decisively through 1.4660 yesterday and is already one cent higher this morning.

"This in turn has taken the pressure off commodity prices and so too the ZAR - USD/ZAR made it to 7.85 yesterday but is back at the low 7.70s this morning. With little on the local or international data and events calendar, we now look for the local unit to languish," they said.

They are looking for a 7.65 — 7.80 range with bias to the downside.

Dow Jones Newswires reports that the dollar is a little higher in Europe Wednesday as European equities bounce a little and the price of crude backs down from overnight highs.

The absence of any major data later in the day is expected to ensure that the US currency continues to trade in a narrow range, especially against the euro, even though its overall uptrend is expected to remain in tact.

The pound, meanwhile, came under early selling pressure but then stalled as minutes of the latest Bank of England policy meeting failed to show that the committee was any more dovish than it had been previously.

The dollar was initially hurt Tuesday by a combination of data suggesting that the US could be facing stagflation as housing starts fell by a sharp 11 percent, and producer prices rose at an annual rate of 9.8 percent, the highest in 26 years.

As equity markets fell and crude prices rebounded, recent positive sentiment towards the US currency drained away.

Bond over-run sees position squaring

Bonds remained weak by noon on Wednesday as investors continued to offload some of their holdings picked up in a previously overbought market.

A dealer added that a weaker auction yesterday had also dampened sentiment.

By 11.40am the short-term government R153 bond was at 9.820 percent from its previous close of 9.720 percent. The medium-term R157 was at 9.180 percent from 9.080 percent at the previous close. The long-term R186 was bid at 8.925 percent from its previous close of 8.810 percent.

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