The rand softened in the morning session on Thursday, amid disappointing Chinese economic data, while locally, eyes will be on a rate decision later in the day.

At 8.35am the rand was bid at 7.4744 to the dollar from 7.41 at its previous close. It was bid at 11.1955 to the euro from its previous close of 11.1156 and was at 12.3910 against sterling from 12.2928.

The euro was bid at $1.4976 from $1.5007 overnight.

RMB analysts John Cairns and Nema Ramkhelawan said that the US dollar index rebounded 0.3 percent as a barrage of unsurprising Chinese data failed to inspire investors or provide a further boost to commodity and growth-linked currencies.

"This did not bode well for the rand, which continues to languish above the 7.40 level this morning. The unit appears oblivious to the most recent spell of risk-taking brought about by expectations that US interest rates will remain at record low levels.

"One would have expected US dollar/rand to be considerably stronger given Euro/US dollar's brief flirtation with 1.50 yesterday. The rand, however, seems unperturbed by the change in Euro/US dollar and has retreated to the safety of its narrow trading range (estimated around 7.28 - 7.45) amid falling gold prices and weaker US stocks," the analysts said.

"Event risk abounds today. US employment and housing data is due later today and should continue to support current market trends. Though important, it appears that data releases have been sidelined in favour of corporate earnings results, which continue to dominate the headlines and steer the performance of US equity markets.

"Continued pressure on US equities is likely to weigh heavily on the rand and limit the extent to which the currency can react to Euro/US dollar gains," Cairns and Ramkhelawan said.

"Despite a slew of international data, our attention turns to SA today, with Governor Mboweni set to deliver his last rate decision before bowing out and handing over the reins to Gill Marcus. Despite the recent appreciation in the rand and its consequent disinflationary effects, our economists expect the SARB to keep the repo rate unchanged at 7 percent. US dollar/rand should trade steadily ahead of the announcement but is unlikely to move significantly in response to the decision since it is broadly expected to remain the same," Cairns and Ramkhelawan concluded.

Dow Jones Newswire reported that the euro fell against the dollar in Asia Thursday as hedge funds and other short-term players sold the common currency after slightly disappointing Chinese economic data curbed investors' appetite for riskier currencies.

But the euro will likely remain on its upward trend against the greenback into the weekend, as players continue to expect that its higher yield relative to the U.S. unit will sustain demand, dealers said.

During Asian trading Thursday, the euro fell after official data showed the Chinese economy grew at 8.9 percent in the July-Sept period, below the average forecast for 9.1 percent growth in a Dow Jones Newswires survey. The euro slipped to a low of $1.4978 after the data release.

Bonds weaker

Bonds weakened by over five basis points in early trade on Thursday in line with a softer-trending rand.

By 8.39am, the short-term government R154 bond was bid at 7.450 percent from previous close of 7.345 percent. The medium-term R157 was bid at 8.625 percent from 8.570 percent, while the long-term R186 was bid at 9.245 percent from 9.190 percent.

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