Johannesburg - The rand remained range bound in early trade on Thursday, but is off its early morning best as the euro softened slightly against the greenback.
At 8.45am the rand was bid at R9.0970 to the dollar from an overnight close of R9.0384 and compared to R9.1659 at 6pm on Wednesday. It was bid at R11.9885 against the euro from a previous R11.9322 and at R13.6408 to the pound from R13.5301. The euro was bid at $1.3183 from $1.3211 overnight.
RMB analyst John Cairns said in his morning report that good US corporate results and the Fed Beige Book report on economic conditions that suggested that the worst may be over for the recession spurred on fresh global equity market gains overnight. The Dow closed up 1.4 percent.
"This helps the rand - add the news that Finance Minister Manuel wants to stay in office and the local unit is suddenly a strong outperformer," said Cairns.
He added, however, that the rand though is showing little inclination to go through the R9.00 level.
"Maybe there will be some follow through on the Manuel story, which came out after the markets closed yesterday, but the Dow, while above 8 000, is looking stretched.
"The key for both will be US corporate results, which today include reports from JP Morgan and Google, and US housing data this afternoon. Recent data has suggested that the housing market may be bottoming out, a key cause of the market's optimism.
"The markets are in the mood to take any positives they can get but it seems we will need a very strong showing to get the Dow and the rand moving again. 8.95 - 9.20 expected for the day," he said.
Dow Jones Newswires reported the euro and dollar are both lower against the yen, while the euro dips against its US rival as risk aversion wanes.
However, dealers doubt any major moves will emerge in coming hours and predict narrow-range trading and quick profit-taking in the major pairs.
However, beyond that time frame, technical analysts at Citigroup say further euro losses are likely over the coming days against the yen.
If the bear market rally isn't over yet, they added, then it's close.
"(We) are expecting a sharp correction to recent gains before a reemergence of the topside potential," they said.
ECB governing council member Axel Weber indicated Wednesday the likelihood of a rate cut at the central bank's May meeting. But the takeaway for many traders: expect nonstandard policy measures.
"The modus operandi of the ECB is to provide verbal guidance. They are not going to not cut," said Jessica Hoversen, a foreign exchange analyst at MF Global in Chicago.