The rand was softer across the board in noon trade on Friday, tracking a weaker euro against the dollar and general negativity filtering through the markets.

At 11.39am the rand was bid at 7.3591 to the dollar from 7.2600 at its previous close. It was bid at 10.9592 to the euro from its previous close of 10.8275 and was at 12.0120 against sterling from 11.7915.

The euro was bid at US$1.4911 from US$1.4935 overnight.

A local trader said: "We are softer across the board, having struggled to break 7.20 against the dollar over the past few days. So we are testing the upper end of the range.

"Gold has also come off quite significantly of late, which has put a dampener on the rand, while bad news filtering through the market regards the smelter at Coega has created a bit of negativity.

"The dollar is also up against the euro. Data out later in the US could have a further impact on the market, particularly if it affects dollar/euro movement.

"However the rand is still in the top end of a range of 7.28 to 7.42, with nothing too untoward," the trader said.

Dow Jones Newswire reports that pre-weekend profit taking helped to lift the dollar in Europe on Friday even though investor appetite for risk is expected to remain strong.

The underlying mood of global markets remains positive, especially after strong third-quarter results from Citigroup Inc. and Goldman Sachs Group Inc on Thursday, which encouraged the view that the credit crunch is well and truly over.

Although US economic data were mixed, the optimism over the global economy was enough to help the price of crude oil futures on the New York Mercantile Exchange rise to a new high for the year of $78.17 a barrel. The last time the price was up there was in October 2008.

However, by the time Asian trading got underway there were signs of fatigue showing through, as investors appeared keen to take profit ahead of the weekend.

Daragh Maher, a senior currency strategist with Calyon Credit Agricole, said some currency pairs, including euro/dollar and euro/sterling, were looking overstretched.

"The stretch is becoming extreme and potentially uncomfortable in some instances. In particular, there is likely to be growing nervousness over the rise of the euro," Maher said.

"The air may be thin, the oxygen lacking, but it does not yet feel like the peak has been reached," he added.

Bonds softer on supply issues

Despite better interest being shown in this week's government inflation linked bond auction, South African bonds were softer in midday trade on Friday as negative supply and inflation concerns continue to weigh on sentiment.

By 12pm the short-term government R154 bond was bid at 7.635 percent from a previous close of 7.535 percent. The medium-term R157 was at 8.610 percent from 8.560 percent, while the long-term R186 was bid at 9.250 percent from 9.200 percent.