The rand remained weak but off the session's worst levels in noon trade on Thursday having earlier tested 11.82 to the dollar – its worst level since March 2002 - as risk aversion continues to rise amid fears of a global recession.

At 11.50am the rand was bid at 11.5174 to the dollar from a previous close of 11.5781. It was bid at 14.8051 to the euro from a previous 14.8516 and at 18.7110 against sterling from 18.8490 before.

The euro was bid at US$1.2843 from US$1.2827 overnight, while gold was quoted at $725.22 a troy ounce from $728.85 overnight.

Several factors are weighing on the rand – falling equities, weaker commodity prices, the soaring US dollar and emerging market risk aversion.

RMB analysts said in their morning report that fresh global recession fears on the back of poor US corporate results sent the Dow down almost 6 percent overnight, setting off another bout of global risk unwinding.

Asian stocks were also weaker this morning, with the Nikkei down 2.6 percent.

"The ZAR hooks on these declines very quickly but seemingly ignores the recovery! And making the ZAR's job even tougher, the continued rise in the USD (with EUR/USD at 1.27 this morning) pushes up USD/ZAR and drives down commodities. There is also the negative spill-over from the Eastern European currencies," RMB noted.

"While the global markets and the ZAR might be due a bounce, short-term moves remain a lottery, all effectively dependent on Wall Street. What does stand out though is that ZAR movements up to 11.90 overnight and at 11.60 this morning are now extreme enough to start generating some local policy response," they added.

RMB said the markets will be watching Reserve Bank Governor Tito Mboweni's speech in Johannesburg this evening.

Dow Jones Newswires reports that deepening fears of a global recession have left the dollar narrowly mixed in Europe Thursday, with the euro once again suffering as a high-yielder.

Although there has been a brief period of respite, with investors taking profits on earlier sharp stock declines, a continued steep fall in global equity markets, rising concern about emerging markets and signs of a further rise in risk aversion are all ensuring that sentiment remains gloomy.

The yen is the primary gainer as its safe-haven role ensures that it remains well supported. Some analysts believe the currency could also be helped by repatriation as Japanese investors bring their money home.

Bonds weaker on rand, IMF statement

Bonds were up to 22 basis points weaker in midday trade on Thursday on the back of a sharply weaker rand and poor sentiment in general, traders said.

By 12pm the short-term government R153 bond was at 10.480 percent from its previous close of 10.260 percent. The medium-term R157 was at 9.940 percent from 9.855 percent at Wednesday's close and the long-term R186 was bid at 9.665 percent from 9.575 percent before.

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