RMB analysts John Cairns and Nema Ramkhelawan on Tuesday pointed to a bout of risk aversion, which they said had interrupted the trend gains in the South African rand.

"It also finally appears as if the authorities are again in the market trying to build reserves ? thus making further rand gains more difficult," they said.

"None of this implies we can't see further rand gains, but it is possible that the lows on US dollar/rand for the year were seen in October. Our core view remains for a period of volatile range-trade ? say between US dollar/rand 7.30 and 8.20.

"Our year-end US dollar/rand forecast of 8.50 looks unlikely to be achieved, but our 11.73 forecast on euro/rand was traded in November and seems a reasonable number for year-end," Cairns and Ramkhelawan said.

RMB highlighted trade in the past few months as providing a good indication of what could be expected next year, "namely zero global interest rates driving capital into emerging markets, but with bouts of risk aversion due to fears over the sustainability of the global economic recovery causing sharp set-backs.

"Reserve Bank activity should limit but certainly not restrict rand gains. Remember that a typical calendar year will see around a 26 percent range on US dollar/rand ? implying a R2.00 range in 2010 is quite reasonable," the analysts concluded.

At 10.51am the rand traded at 7.4198 against the US dollar, having closed at a similar level on Monday.