Rand firmer at midday

The South African rand firmed in midday trade on Thursday tracking the euro which reacted to a successful auction of five-year bonds by Spain, easing concerns about the euro zone's sovereign debt issues.

At 11.43am local time the rand was bid at R7.24 to the dollar, R9.32 to the euro and R11.17 to the pound. The euro was bid at $1.2831 from $1.2821 overnight.

A local dealer said: "Sentiment is towards a stronger rand again which has broken out of the upward progressive channels we saw earlier in the week.

"The euro is well bid, putting pressure on the dollar, so we should see the rand at the low 7.20s against the dollar."

The dealer noted that ECB President Jean-Claude Trichet was expected to pledge continued support for countries in the euro zone wrestling with sovereign debt issues later today, lending to further euro strength.

Nedbank Capital said in a note that the rand is likely to be less affected by domestic economic data than by the performance of the euro, equity markets and commodity prices, which could maintain the currency within a narrow short-term trading range.