The rand tracked a softer euro and weaker Asian markets lower by noon on Wednesday. The local currency is expected to breach 8.00 against the dollar.

At 11.49am the rand was bid at 7.8965 to the dollar from a previous close of 7.8167. It was bid at 11.3772 to the euro from a previous 11.2868 and at 13.3980 against sterling from 13.2420.

The euro was bid at US$1.4392 from US$1.4397 overnight.

A local trader said: "A softer euro, weaker Asian markets and Dow futures have led the rand down." He said that 7.95 against the dollar is a crucial level on the upside, which would then see the rand move past 8.00 in the days to come.

"There is a bit of data out in the US later so we will track that," the trader said.

RMB analyst Nema Ramkhelawan said in a daily report that it appeared as though the recession was finally starting to loosen its icy grip on the global economy. "Global PMI data, better-than-expected international automakers' quarterly earnings results and improved US housing figures represent milestones on the road to a slow and protracted recovery. The generally optimistic news has kept US equities afloat above the 9,000 level and bolstered investor sentiment," she said.

"USD/ZAR, however, is seemingly unperturbed by global happenings, hovering around 7.85. Fundamentals would suggest a much stronger level but despite EUR/USD's surge to 1.44 (over the last few days), rising commodity prices and buoyant US equities, the ZAR continues to trade within a narrow range.

"The local currency, which is usually sensitive to global sentiment, appears unenthused by the recent stream of economic data and, with little in the way of event risk, is likely to remain range-bound for much of the day. A move past 1.45 on EUR/USD could provide the impetus for renewed ZAR strength, but sharp movements in the EUR are unlikely prior to the ECB rate decision on Thursday," Ramkhelawan said.

Dow Jones Newswires reports the dollar has held steady with little clear direction in European trading hours, as the climb in riskier assets and currencies seen over recent days ran out of momentum, although a rise in UK industrial output data shoved it lower against the pound.

Stronger-than-expected US pending home sales data late on Tuesday broadly kept the rally in risky assets intact, maintaining the pressure on the dollar.

But with the Bank of England and the European Central Bank set to announce their interest rate decisions on Thursday, and moreover with the crucial US non-farm payrolls report due on Friday, traders proved themselves unwilling to place fresh bets.

"Consolidation may be the order of the day in the currency world today," said analysts at Brown Brothers Harriman in a note to clients. "This is a good session to take profit," they added.

That sentiment has largely sapped key currencies of direction for now, and few if any analysts predict any robust currency moves now until key events and data are out of the way.

Still, the pound shot higher after June's reading of manufacturing output showed a surprising 0.4 percent climb on the month, against economists' expectations for a flat reading.

Rand, lack of real money weigh

Bonds had capped their earlier weakness by noon on Wednesday, but conditions remained uncertain on the weaker rand and a lack of institutional interest around the auction on Tuesday. One positive, though, could be a real money driver ahead of the index up- weighting on Thursday.

By 12.04pm the short-term government R153 bond was at 7.900 percent from 7.800 percent at it previous close. The medium-term R157 was at 8.505 percent from 8.435 percent, while the long-term R186 was at 8.960 percent from 8.865 percent before.