The rand weakened a tad from its morning levels by noon on Tuesday, taking direction from the euro which came off its best levels.

At 11.41am the rand was bid at 7.3653 to the dollar from 7.3225 at its previous close. It was bid at 10.8955 to the euro from its previous close of 10.8110 and was at 11.6130 against sterling from 11.5477.

The euro was bid at $1.4790 from $1.4778 overnight.

"We are slightly weaker than this morning. The rand tried to get below the key level of 7.29-7.30 but couldn't hold. The euro has also come off its highs of above 1.48," a trader said.

"We are well within a range of about 7.30-7.54, and I think we will continue in this range for a while," he said.

RMB analysts John Cairns and Nema Ramkhelawan said earlier that the brief surge in the gold price to unprecedented highs and the loftier oil price also gave impetus to commodity currencies, notably the New Zealand dollar and the rand.

"The ZAR, however, strengthened on global developments and traded near-14- month highs but could not break the elusive USD/ZAR7.30 barrier. It appears as though the unit encounters considerable resistance at this level, which is suggestive of either SARB purchases or considerable interest by importers at these rates. We suspect that the ZAR will continue to meander in a minor range and remain content below 7.40 over the next few days," said the analysts.

"Nevertheless, the ZAR will continue to be led by movements in the gold price and draw support from a stronger EUR/USD," they added.

Dow Jones Newswire reports that the dollar is narrowly mixed in Europe on Tuesday as the market waits for the third-quarter earnings season to get underway in earnest.

Sentiment remains generally positive - with strong Chinese and New Zealand data contributing to another rise in global equity markets.

However, strong housing and retail sales data from the UK failed to lift the pound for long, with sterling resuming its recent sharp slide.

Strong retail sales from New Zealand and a robust increase in Chinese business and confidence surveys only lifted sentiment further. Equities rallied, with the Dow Jones Industrial Average gaining 0.2 percent, the Nikkei 0.6 percent and the Shanghai Composite 1.6 percent, commodity prices rose and emerging markets boomed.

Calyon said its risk aversion index is now at its lowest level since Sept. 28, 2008.

The focus is now shifting to whether third-quarter earning will live up to expectations and sustain the improvement in market sentiment. First up to report later Tuesday are Intel and Johnson & Johnson, with JP Morgan Chase & Co. and Morgan Stanley due on Wednesday.

Market participants are also looking to see if the Bank of Canada wades into the market to stop the Canadian currency's sharp rally, which threatens the country's economic recovery.

Better offers for bonds

Better offers streamed through the bond market on Tuesday morning in the wake of a poor showing at the weekly government auction.

By 11.32am, the short-term government R154 bond was bid at 7.590 percent from a previous close of 7.470 percent. The medium-term R157 was at 8.475 percent from 8.420 percent, while the long-term R186 was bid at 9.085 percent from 9.010 percent.