The rand was at its strongest levels for 14 months against an under-pressure dollar in the morning session on Thursday.

At 8.56am the rand was bid at 7.2123 to the dollar from 7.2270 at its previous close. It was bid at 10.7978 to the euro from its previous close of 10.7885 and was at 11.6635 against sterling from 11.5680.

The euro was bid at $1.4943 from $1.4934 overnight.

A local trader said: "It's a case of follow the dollar today. The dollar has come under pressure, and we actually expected the rand to dip below 7.18- 20.

"Everything is overdone at the moment, the rand is overdone, as is the euro, with no signs of a turnaround," he said.

Said RMB analysts John Cairns and Nema Ramkhelawan in a morning report:

"Data releases are mainly concentrated in the US today. The outcome of the Empire State and Philly Fed regional surveys of manufacturing activity will indicate whether the dip in September's ISM manufacturing index was the beginning of a renewed spell of weakness or merely a temporary blip.

"US corporate earnings results remain firmly in the spotlight. JP Morgan's remarkable US$3.6 billion quarterly profit set the precedent for rival banks such as Citigroup, Goldman Sachs and Bank of America, whose results are due over the next two days," the analysts said.

"In a day characterised by fanfare and jubilation, the markets posted considerable gains. US equities pierced the elusive 10,000 barrier for the first time in little more than a year as US banking giant JP Morgan reported its biggest profit in over two years," RMB said.

"The gold price skyrocketed to $1070 an ounce as a result of the broad based US dollar weakness and helped rouse US dollar/rand from its deep slumber. After days of meandering in a narrow range, the local unit broke the 7.30 level and appreciated to its strongest level since August 2008. US dollar/rand has the potential to test 7.20 today given euro/US dollar's rapid ascent to 1.50 and higher levels of volatility," Cairns and Ramkhelawan concluded.

Dow Jones Newswire reported that the euro rose to a fresh 14-month high against the dollar in Asia on Thursday as hawkish comments by Reserve Bank of Australia (RBA) Governor Glenn Stevens and strong Asian shares fuelled appetite for riskier currencies.

The RBA governor's remark also prompted players to buy other high-yielding currencies, pushing the dollar broadly lower. The Dollar Index, which gauges the currency's value against six majors including the euro, declined to 75.25, also a fresh 14-month low.

Also helping accelerate such buying was the solid performance in Asian share markets, dealers said.

The Philadelphia Federal Reserve's manufacturing index for October is due at 14:00 GMT. Economists surveyed by Dow Jones Newswires expect the index to log in at 12 compared with September's 14.1. The US consumer price index due at 12:30 GMT is expected to show a 0.1 percent rise in September compared with a 0.4 percent gain in the previous month, they say.

Bonds ignore rand

Bond yields flatly ignored the sparkling rand in early trade on Thursday to trade six basis points weaker as negative supply and inflation concerns continued to impinge on sentiment.

By 8.44am, the short-term government R154 bond was bid at 7.620 percent from a previous close of 7.505 percent. The medium-term R157 was at 8.560 percent from 8.495 percent, while the long-term R186 was bid at 9.185 percent from 9.105 percent.