The rand was range bound in the noon session on Monday, tracking euro/dollar play amid Columbus Day, a national holiday in the US.

At 11.32am the rand was bid at 7.4185 to the dollar from 7.3850 at its previous close. It was bid at 10.9495 to the euro from its previous close of 10.8795 and was at 11.7385 against sterling from 11.7040.

The euro was bid at $1.4733 from $1.4718 overnight.

RMB analysts John Cairns and Nema Ramkhelawan said in a morning report: "Despite the fluctuations in the US dollar, volatility remains fairly depressed resulting in little movement for the rand. The lack of event risk today suggests that the rand's performance will remain quite subdued. Local data is rather scarce over the next few days, while international releases are concentrated in the latter half of the week."

A local trader said: "We are range bound at 7.40-7.50 against the dollar. New York is out (national holiday) as is Tokyo. We continue to track the dollar against the euro."

Dow Jones Newswires reported that Hawkish comments from the US Federal Reserve over the weekend lifted the dollar in Europe on Monday.

Holidays on Monday in Japan and the US are helping to keep the overall level of turnover low.

Analysts said there is also a reluctance to take up new positions ahead of a host of economic data due later this week as well as the third-quarter corporate earnings season.

Strong results are widely expected to boost global stock markets and bring a greater interest in risky asset markets that could be damaging for the dollar.

On the other hand, Fed officials have been busy talking the dollar higher with a variety of hawkish comments warning about inflation risks and hinting at the threat of an increase in interest rates.

Currency strategists at BNP Paribas said that this verbal intervention was hardly surprising given the dollar's 15% fall against the euro in recent months and the sharp rally in the price of gold over US$1,000 a troy ounce.

"We should expect US verbal intervention to remain strong until the dollar has regained some moderate ground," the BNP Paribas team said.

The dollar was also helped by stronger-than-expected trade data on Friday, with the US trade gap narrowing to $30.71 billion from a downwardly revised $31.85 billion, instead of widening to $33.6 billion as expected.

Bonds pushed topside

Bonds weakened further than expected during the morning session on Monday in the wake of issuance blues. A dealer said fixed income issuance concerns continued to plague the market this morning.

By 11.56am, 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 8.485 percent from 8.405 percent.

Dealers spoken to by I-Net Bridge had earlier expected a range for the day of around 8.380 percent to 8.460 percent, but this was broken on the topside as momentum shifted to further weakness.

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