The rand remained solidly on the front foot in noon trade on Wednesday as the dollar came under further pressure.

At 12:00 the rand was bid at 7.2535 to the dollar from 7.3097 at its previous close. It was bid at 10.8375 to the euro from its previous close of 10.8585 and was at 11.6258 against sterling from 11.6243.

The euro was bid at $1.4904 from $1.4852 overnight.

"The rand is stronger on the back of the dollar's weakness. It's just tracking the weaker dollar at the moment," a local currency trader said.

Said RMB analysts John Cairns and Nema Ramkhelawan said in a morning report: "USD/ZAR dipped briefly below the 7.30 level yesterday, mainly due to the acceleration in the gold price to unprecedented highs, but quickly ran out of steam and settled around 7.32."

The analysts said that even though the ZAR had recovered almost 30 percent of its value this year, it appeared to be tailing a pack of emerging market and commodity currencies at the moment, which had surged ahead as a result of loftier commodity prices and fervent risk-taking.

"There seems to be a stranglehold on further ZAR gains, which would suggest possible Sarb involvement at the 7.30 level but the reserve figures have not supported this assumption in the past. Although the ZAR is well supported at these levels, it does not have the momentum to forge ahead and appears to be trapped in a narrow range.

"Despite a slew of international data releases due later this week, event risk is still concentrated in the US with corporate earnings season under way. Unexpected surprises in earnings results may fuel the relentless risk-taking that has been evident over the last month, and provide further impetus to high- yielding currencies and possibly the ZAR."

Cairns and Ramkhelawan said that what's more was that the US dollar remained under pressure.

The unit plunged to 14-month lows against a basket of currencies and is likely to languish at these levels over the short term as optimism over the sustainability of the global recovery mounts, resulting in a diversification away from the dollar into alternate assets.

"The latter half of the week is brimming with data, which should rouse the market. Retail sales figures are due locally and in the US. FICC economist, Carmen Nel, anticipates a slight improvement in the SA sales figures on account of a lower petrol price and marked reductions in the price of non-durable goods," they said.

Dow Jones Newswire reports that the dollar was knocked lower in Europe Wednesday with its trade-weighted index tumbling to a new record low early in the day.

Federal Reserve Vice Chairman Donald Kohn started the move Tuesday with a bearish assessment for US growth and inflation.

Sentiment was just made worse when Intel came in with stronger-than-expected results after the close of trading in New York and led to another surge in interest in risky assets.

As most Asian stock markets, except for the Nikkei, surged ahead, the price of gold reached a new record high and the price of crude oil rallied to a new high for the year.

The positive mood was helped by news from China that its exports hadn't declined as much as the market had anticipated. Instead of falling 21 percent in the year to September, they were down by only 15.2 percent, a big improvement on the 23.4 percent fall registered in August.

The Shanghai Composite Index reflected this with a 1.2 percent rally on the day.

Kohn's comments, warning that the US recovery would probably not be V- shaped and that interest rates would remain low for an "extended period," came in stark contrast to some other suggestions from Fed officials that they remain ready to hike interest rates if needed.

In his assessment, Kohn also failed to make any explicit mention of the dollar itself, giving further encouragement to investors to sell the US currency.

Bonds improved by two pips during the morning session on Wednesday as a gloomy retail picture was reported. This raises just a glimmer of hope of another rate cut, although a dealer spoken to did not buy into this prospect.

By 12.18am, the short-term government R154 bond was bid at 7.580 percent from a previous close of 7.515 percent. The medium-term R157 was at an unchanged 8.490 percent, while the long-term R186 was bid at 9.110 percent from 9.070 percent.