The rand remained on the front foot in late afternoon trade on Tuesday with a trader saying general dollar weakness was contributing to the strengthening of the currency.

At 3.49pm the rand was bid at 7.3907 to the dollar from 7.4525 at its previous close. It was bid at 10.8085 to the euro from its previous close of 10.9065 and was at 12.1819 against sterling from 12.3500.

The euro was bid at US$1.4599 from US$1.4626 overnight.

"It's generally on the back of dollar weakness across the board, it still seems to be on the back foot. There is foreign demand for the rand," the trader said.

"We are looking for a base of about 7.20-7.30, with some resistance above the mid 7.50s.

"I believe there is a little bit more strength to come. It looks a bit overdone, but while this continues and the equities remain strong the strength will continue," he said.

Said JP Morgan in their forex report: "$ZAR has reasserted the downside bias with a break to new lows and in line with the overall bearish set-up following the violation of the key 7.6127 July low.

"This should allow for a closer test of the 7.35 area, if not the more important target at the 7.18 low from 2008," analysts said.

Dow Jones Newswires reports that major currencies markets were mostly little changed on Tuesday as investors await key US reports, including retail sales and Producer Price Index data, both due at 8.30am EDT.

The euro remained above the US$1.46 mark, but off its nine-month high, which it hit on Monday. Increased risk appetite, fuelled by positive global economic data has continued to keep a "dollar-sell" environment alive.

Retail sales numbers - tied directly to the US consumer - could be a linchpin in a US economic recovery, analysts said.

If the sales numbers are seen as encouraging, risk appetite should increase, sending investors into the higher-yielding euro from the safe-haven dollar.

But if the numbers disappoint, the dollar sell-off that began after last week's US Labour Day holiday could come to an end as investors could seek safety in the greenback if they fear US consumers will drag down an economic recovery.

Currency investors seemed to continue shaking off a possible US trade dispute with China. The dollar had strengthened because of investor concern over an escalating trade crisis, but after China filed a complaint with the World Trade Organisation, as opposed to issuing counter-tariffs, analysts said currency investors again turned toward riskier assets.

Investors refrain from chasing yield

Bond investors refrained from chasing yield down on Tuesday despite a strong rand as prices were found less enticing at current levels.

By 3.50pm the short-term government R154 bond was bid at 7.290 percent from a previous close of 7.260 percent. The medium-term R157 was at 8.080 percent from 8.060 percent, while the long-term R186 was bid at 8.580 percent from 8.640 percent.

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