The rand was steady in noon trade on Thursday after having been forced to give up some of its earlier gains after losses on Wall Street overnight sparked a renewed rise in risk aversion.

By 11.40am on Thursday the rand was bid at 7.6048 to the dollar from a previous close of 7.5731. It was bid at 11.6671 to the euro from a previous 11.6515 and at 14.8873 against sterling from 14.7843 before.

The euro was bid at US$1.5340 from US$1.5398 overnight, while gold was quoted at $872.43 a troy ounce from $868.80 overnight.

South African market analysts said volatility on the stock market was a potential threat to the carry trade extending the rand's recovery.

"This has been borne out overnight as Wall Street's losses have once again fuelled a fresh surge in risk aversion," they explain.

Dow Jones Newswires reports that the dollar is mixed in Europe Thursday, falling against the yen and rising against the euro as the market waits for interest rate decisions from the Bank of England and the European Central Bank later in the day.

The biggest mover is the euro, which came under steady selling pressure on concern that recent weak economic data in the euro zone will pressure the ECB to soften its previously hawkish tone.

Although the ECB isn't expected to cut rates at this meeting, analysts are looking for President Jean-Claude Trichet to express at least some worries about the slowdown in the region's major economies and pave the way for rate reductions later in the year.

An article in the Financial Times suggesting that US and euro-zone officials are now united in their desire to see a stronger dollar against the euro also helped to undermine the single currency, which was pushed lower nearly across the board.

Bonds steady on rand, position squaring

Bonds did not retreat any further during the morning on Thursday as the rand's ship sailed a little more smoothly after its overnight ructions and some position squaring took place.

By 11.47am the short-term government R153 bond was at 10.350 percent from its previous close of 10.305 percent, while the medium-term R157 was at 9.470 percent from its previous close of 9.440 percent. The longer-term R186 bond was at 9.300 percent from its previous close of 9.260 percent.

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