Despite a smidgeon of strength in early trade on overdone selling overnight, the rand remained wedged in a weaker band at over eight to the dollar in early trade on Friday.

By 9.14am the rand was bid at 8.0155 to the dollar from a previous close of 8.0304. It was bid at 11.4652 to the euro from a previous 11.4458 and at 14.1156 against sterling from 14.1561 before.

The euro was bid at US$1.4300 from US$1.4240 overnight, while gold was quoted at $798.75 a troy ounce from $795.05 overnight.

A senior Johannesburg-based rand dealer said that "massive risk aversion" had led to the rand's weakness but the little bit of strength from overnight levels was purely because the selling was overdone last night.

He does feel the trend to weakness in emerging markets is in place for now, with concerns about the massive global slowdown weighing on these markets.

Dow Jones Newswires reports the euro is again under pressure Friday, although dealers report some buying off its session lows.

On Thursday, the euro fell to its lowest level of the year against the dollar, and the UK pound was also crushed after the European Central Bank downgraded its economic growth forecast for 2009 to as low as 0.6 percent.

In comments after the ECB left its key interest rate steady at 4.25 percent, bank President Jean-Claude Trichet noted a slowing in corporate and household demand in countries that use the euro, and said the euro zone economy is stuck in a "trough".

"The overall trend is a selling of European currencies against other majors, both the dollar and the yen," said Hidetoshi Yanagihara, currency strategist at Mizuho Corporate Bank in New York.

Weak rand places bonds on back foot

Bonds were under pressure in early trade on Friday due to a weak currency at over eight to the dollar. Bonds were up to eight basis points softer than their closing levels.

Traders say they will continue to monitor the currency closely as continued weakening of the rand will put pressure on the bond market.

"Yields are very high (weak) in the market on the back of a weakening currency," a bond trader said.

By 9.25am the short-term government R153 bond was at 10.040 percent from 9.955 percent at the previous close. The medium-term R157 was at 9.315 percent from its previous close of 9.230 percent overnight and the long-term R186 was bid at 9.080 percent from Thursday's close of 8.970 percent.

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