The rand was firmer but range bound in late trade on Thursday, having paid scant attention earlier in the session to worse than expected producer price inflation data for July.

Analysts said that although the PPI data was worse than even some of the most pessimistic of forecasts, it was generally felt that the cycle for interest rate hikes had now peaked and that the next move is likely to be down.

By 3.40pm the rand was bid at 7.6800 to the dollar from a previous close of 7.7350. It was bid at 11.3477 to the euro from a previous 11.3900 and at 14.1161 against sterling from 14.1860 before.

The euro was bid at US$1.4761 from US$1.4714 overnight, while gold was quoted at $832.25 a troy ounce from $825.50 overnight.

"The rand hasn't really shown any reaction to the PPI data and seems to be trading in ranges for now," a local currency trader said.

South Africa's producer price index rose by 18.9 percent year-on-year in July from 16.8 percent year-on-year in June, Statistics South Africa (Stats SA) data on Thursday showed.

The PPI rose 2.7 percent on a monthly basis after June's monthly increase of 2.6 percent.

PPI was expected to be at 17.6 percent y/y, a survey by I-Net Bridge found, with forecasts ranging widely from 15.4 percent y/y to 19 percent y/y.

Dow Jones Newswires reports that the dollar moved higher early Thursday in New York after a report showed the U.S. economy grew at a much faster clip in the second quarter than first thought.

The dollar's modest rise on the data helped it erase some of its overnight losses from rising oil prices, leaving it only slightly weaker versus the euro from day-earlier numbers as the North American session kicks off.

The Commerce Department said gross domestic product rose at a seasonally adjusted 3.3 percent annual rate in April-through-June period. That's well above a previous estimate of 1.9 percent, and also beats economists' expectations for a 2.7 percent rise.

"The numbers just came out a little stronger than the market was looking for, and that's given the dollar a lift," said Adam Boyton, currency strategist at Deutsche Bank in New York. "But really, the numbers don't really change the outlook as far as currencies are concerned."

Meanwhile, the latest weekly jobless claims data, released Thursday, had little impact on currency markets. It showed the number of workers filing first-time claims for unemployment benefits fell slightly last week.

Bonds off their best on PPI

Bonds weakened off their best levels in afternoon trade on Thursday as they reacted to much higher than expected factory gate inflation.

"The market is weaker than its morning levels, but as a whole it is pretty range bound," a bond trader said.

By 3.30pm the short-term government R153 bond was at 9.715 percent, unchanged from its previous close. The medium-term R157 was at 9.110 percent from 9.115 percent at the previous close. The long-term R186 was bid at 8.880 percent from its previous close of 8.875 percent.

I-Net Bridge