The rand was range bound in thin noon trade on Wednesday ahead of the long weekend.

Local conditions are thin this week as it is only a two-day trading week with South African markets closed for three public holidays – last Monday, tomorrow and Friday.

"I think we will see a bit of a flurry up to lunchtime as the rand consolidates ahead of the long weekend," said a local trader.

By 11.45am the rand was bid at 7.5926 to the dollar from a previous close of 7.6037. It was bid at 11.8024 to the euro from a previous 11.8253 and at 14.9429 against sterling from 14.9527 before.

The euro was bid at US$1.5541 from $1.5567 overnight, while gold was quoted at $867.53 a troy ounce from $869.25 overnight.

Markets will be eyeing the upcoming FOMC decision on US interest rates, the outcome of the Q1 US GDP data and the local trade data later.

Meanwhile, Dow Jones newswires reports that the dollar is higher in Europe Thursday as the euro tumbles after a weaker-than expected survey on German business sentiment raises questions of whether the European Central Bank will remain hawkish.

The US currency was also getting support from a report in the Wall Street Journal suggesting that the Federal Reserve may be moving the other way and that another rate cut at its next policy meeting ending 30 April can't be taken as a foregone conclusion.

An easing in crude oil prices, a sharp rally in Chinese stocks and signs of a further decline in risk aversion are also all playing into the dollar's hands.

However, the key event of the European morning was the news that the main index Ifo fell to 102.4 in April from 104.8 in March, instead of easing slightly to 104.3 as expected.

The fall came as a shock to currency markets as it suggested that the German economy isn't weathering the credit crunch as well as many had expected and could now increase pressure on the ECB to cut interest rates sooner rather than later.

Bonds off worst on bargain hunting

Bonds pulled back off their worst levels during the morning on Wednesday as a few investors bought into weakness. This comes after bonds had weakened after worse-than-expected credit extension data was released earlier in the day.

By 12.08pm the short-term government R153 bond was at 10.320 percent from its previous close of 10.300 percent, while the medium-term R157 was at 9.460 percent, unchanged from its previous close. The longer-term R186 bond was bid at 9.335 percent from its previous close of 9.295 percent.

I-Net Bridge