The rand was softer in the morning session on Monday following a weaker euro against the greenback, amid Columbus Day, a national holiday in the US.

At 8.57am the rand was bid at 7.4522 to the dollar from 7.3850 at its previous close. It was bid at 10.9630 to the euro from its previous close of 10.8795 and was at 11.7705 against sterling from 11.7040.

The euro was bid at $1.4703 from $1.4718 overnight.

A local rand trader said: "It's a US holiday today. If we get to 7.48-50 against the dollar, we could go to 7.60.

"The potential is there if the euro dips further against the dollar. We will continue to track the dollar," he said.

Dow Jones Newswire said that the dollar rose against the yen and the euro in Asia on Monday, building on gains posted on Friday after US Federal Reserve Chairman Ben Bernanke said the Fed is ready to tighten monetary policy once a recovery takes hold in the world's largest economy.

With Japan's financial markets closed for a local holiday, the dollar also remained supported by a better-than-forecast report on the US trade balance in August released on Friday. But currency analysts say the greenback's prospects remain poor, and it should move lower against main rivals in coming days.

The dollar is out of favour with currency traders because ultra-low interest rates in the US - expected to remain in place for some time yet - have resulted in greater investor interest in other higher-yielding currencies, analysts of Brown Brothers Harriman said in a report.

"Hawkish Fed comments may have helped... but the dollar outlook remains bearish," BBH added, noting that the minutes of the Fed's meeting in September, to be released on Wednesday, may provide some more clarity on the Fed's thinking and the dollar's short-term trend.

Many analysts say hikes are only likely from the third quarter next year at the earliest, given the weak state of the US economy. That has fuelled a dollar sell off for the last two months, only corrected in part by recent gains.

Bonds on back foot

Bonds opened on the back foot on Monday as sentiment remained negative ahead of a large auction on Tuesday.

"We are weaker this morning and it is the same story as last week ahead of the supply data," said a local bond dealer.

The National Treasury will auction 600 million rand worth of R204 bonds and R1.4-billion worth of R209 bonds on October 13.

By 9.03, the short-term government R154 bond was bid at 7.370 percent from a previous close of 7.465 percent. The medium-term R157 was at 8.460 percent from 8.405 percent.

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