The rand softened in midday trade on Thursday, spooked by speculation that government had plans to freeze the local currency to ensure economic stability.

News reports on economy minister Ebrahim Patel's plans to freeze the rand, were quickly quashed, according to a report by Bloomberg News, citing a spokesperson for Ebrahim Patel, Minister of Economic Development.

At 11:40 the rand was bid at 7.51 to the dollar from 7.41 at its previous close. It was bid at 11.2568 to the euro from its previous close of 11.1156 and was at 12.4525 against sterling from 12.2928.

The euro was bid at $1.4956 from $1.5007 overnight.

A local trader said: "Talk about a rand freeze sparked a knee-jerk reaction which saw the rand fall to 7.52 against the dollar, but back again to 7.46.

"At 7.45 we should break higher, and if the euro continues to weaken, we could see a level of 7.65," the trader said.

"Unless something dramatic is announced, the rates decision should not have an impact," he added.

RMB analysts John Cairns and Nema Ramkhelawan said in a morning report: "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.

"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," the analysts said.

Dow Jones Newswire reported that the dollar is higher in Europe on Thursday as global equity markets tumble on fresh concerns over the world recovery.

The pound has also been hit by a suggestion from the Bank of England that quantitative easing could be increased after all. Sterling had been helped earlier this week by minutes of the last bank meeting, which failed to entertain a further increase.

News from China that third-quarter gross domestic product growth amounted to only 8.9 percent rather than the 9.1 percent that was expected appears to have undermined some of the recent optimism over the global recovery.

Although GDP growth accelerated from 7.9 percent in the second quarter, the data triggered an immediate sell off in equity markets.

Economic developments in Japan were also disappointing, with the latest trade figures for September showing the country's trade surplus shrinking rapidly as exports fell by 0.8 percent last month.

The euro was down at $1.4961 from $1.4998 as it continued to back away after a brief rally over $1.50 Wednesday.

Bonds track rand

Bonds tracked the rand weaker during the morning session on Thursday, with the repo decision looming for the market this afternoon.

While the decision itself is not really in doubt – unchanged – investors at the longer areas of the curve will be interested in the thinking of the Committee further out. New central bank Governor Gill Marcus is currently at the Bank before taking up the reins in November.

By 11.47am, the short-term government R154 bond was bid at 7.495 percent from a previous close of 7.345 percent. The medium-term R157 was at 8.680 percent from 8.570 percent, while the long-term R186 was at 9.295 percent from 9.190 percent.

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