The rand was sharply weaker against major currencies in late trade on Wednesday – trading back at near six-year worst levels versus the dollar – after poor US data that has served to amplify concerns about a global recession, once again sparking a major flight from riskier assets.

At 3.45pm the rand was bid at 9.3927 to the dollar from a previous close of 9.0992, having tested an intraday worst level of 9.4566 on Wednesday. It was bid at 12.7451 to the euro from a previous 12.4062 and at 16.4685 against sterling from 15.8410 before.

The euro was bid at US$1.3581 from US$1.3620 overnight, while gold was quoted at $837.90 a troy ounce from $836.45 overnight.

RMB analysts said that after record stock market gains on Monday, the euphoria had given way to recessionary fears. Markets were now pondering the possibility of a deep slowdown in the world economy.

"Emerging markets are expected to be hard hit by a global recession with the accompanying falling demand for commodities and exports a negative factor, and in particular those with high current account deficits such as ourselves and Turkey are at risk," RMB added.

Dow Jones Newswires reports that the dollar is modestly stronger against the euro early Wednesday in New York as investors shrug off weak US retail sales data since the struggling economy is at least driving down oil prices.

The euro declined under $1.36 as crude oil prices early Wednesday fell to a 13-month low, under $75 a barrel. This led investors in commodities to dump their positions and head back into the greenback, lifting its foreign exchange value.

Amid the dollar-buying, investors shrugged off a US government report indicating retail sales had their sharpest drop in three years during September. Retail sales declined 1.2 percent last month, the Commerce Department said Wednesday.

Analysts said the dollar actually may have derived some "perverse" support from the weak retail sales number, as it may cause US stock markets to decline more Wednesday, when they open at 9.30am EDT (1.30pm GMT).

During the recent turmoil in markets related to the global financial crisis, the dollar has benefited against most currencies when stock markets decline, as it fueled risk aversion that drove investors into the dollar for its safe-haven status.

"It's still kind of stock-watching in forex," said Alan Ruskin, head of international strategy at RBS Greenwich Capital. "Oddly enough (the retail sales data) may be helping the dollar...it's perverse."

Weak rand fails to impact on bonds

Bonds remained fairly flat in late afternoon trade, continuing to ignore the currency, which had weakened further in afternoon trade.

"Bonds are amazingly resilient," a bond trader said.

"Looking at the international scenario, it implies that the slowdown in growth has had very little selling pressure on bonds," he added.

Bonds were slightly weaker in early trade, reacting to the weaker currency, but by noon bonds were flat and showed little reaction to the currency, with traders saying, "It is just a normalisation of the yield curve."

By 3.57pm the short-term government R153 bond was at 9.175 percent from its previous close of 9.190 percent. The medium-term R157 was at 9.000 percent from 8.995 percent at Tuesday's close and the long-term R186 was bid at 8.755 percent from 8.730 percent before.

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