Rand firmer in early trade

The rand was firmer in early trade on Thursday, despite the euro not having done much overnight. Analysts said the rand, along with the Australian dollar, were benefitting from an interest in high yielding currencies.

At 8.40am the rand was bid at R7.64 to the dollar, R9.39 to the euro and R11.23 to the pound. The euro was bid at $1.2293 from $1.2236 previously.

RMB analysts said in their morning report that the strengthening of the ZAR and the AUD, however, shows that there is still an insatiable appetite for high-yielding currencies in the current risk environment.

"Upbeat global data, including positive manufacturing PMIs for emerging Asia and Australia as well as a surge in US pending home sales for April, supported a sharp recovery in US and emerging market stocks, reflecting improved demand for riskier investments amid continued uncertainty over the sovereign debt crisis.

"Yet, investors continue to show distaste for EUR/USD, which should remain suspended at 1.23 ahead of the notorious US non-farm payrolls data tomorrow," they added.

EUR/ZAR is nudging ever closer to the key technical level of 9.30 as a result, with USD/ZAR strength likely to persist today, they said.

Dow Jones Newswires reported that overnight the euro made only slight headway against the US dollar and other majors despite the "risk-on" shift in market sentiment.