Rand is still following the euro

The rand remained range-bound in midday trade on Monday, tracking the softer euro against the US dollar.

At 11.41am the rand was bid at R7.83 tot the dollar, R9.73 to the euro and R11.33 to the pound. The euro was bid at $1.2416 from $1.2533 previously.

A local trader said: "The rand opened a tad firmer against the US dollar, testing R7.78, but has since retreated as the euro came off against the dollar. The range for today is R7.75-R8.00. However, the rand is a lot steadier than levels seen late last week when the unit touched a worst level of 8.08 to the US dollar.”

If anything, global sentiment has been helped by positive talks between the U.S. and China, which lowers the risk of a trade war, and by news that Germany plans to launch an austerity programme next year.

Good news on deficits came from the UK as well, as the new UK government started to unveil its proposals for more than GBP6 billion of spending cuts.

The volatility in market sentiment was illustrated by the performance of the Australian dollar, which initially came under heavy selling pressure as investors pulled out of risky markets, but then rebounded to trade back up over $0.83 where it had begun.