A range bound rand opened with a yawn in the morning session tracking a weaker dollar, and with eyes on Tuesday's mini Budget.

At 9.00am the rand was bid at 7.4560 to the dollar from 7.4650 at its previous close. It was bid at 11.2120 to the euro from its previous close of 11.1902 and was at 12.1403 against sterling from 12.1615.

The euro was bid at $1.5042 from $1.5002 overnight.

A local trader said: "It is all very quiet this morning. The rand is in a range of 7.42-50 against the dollar with an eye on tomorrow's Budget speech, although unless something dramatic is said, even that may not change things too much."

RMB analysts John Cairns and Nema Ramkhelawan said though bias was still in favour of US dollar losses, the market seemed little unchanged from last week.

"US dollar/rand remains centred around 7.45, the price of bullion is poised at $1054 an ounce, and despite surging to 14-month highs against the US dollar, the euro is still wading water around 1.5025.

"US dollar/rand should remain rather subdued given today's data draught. The unit should remain range-bound, after weakening slightly amid profit-taking and limp US equities late last week, though volatility is likely to increase as local and international event risk becomes more prevalent in the coming days," the analyst said.

"Despite an array of anticipated US data releases, 3Q09 GDP will be of particular interest. A healthy number could offer the US dollar some respite as markets might perceive the data as motivation for monetary policy officials to increase US interest rates sooner than expected," RMB said.

"A dive in US equities, however, might curb any enthusiasm derived from the positive data. After soaring to 10 000 the Dow is struggling to maintain its upward trend as the effect of corporate earnings season peters out and investors search for more definitive signs of the strength of the economic recovery. This might pose some measure of upside risk to the rand over the next few days," Cairns and Ramkhelawan concluded.

Dow Jones Newswire reported that the dollar fell against the euro and the yen in Asia on Monday after an official newspaper of the Chinese central bank said China should cut its US dollar holdings, adding to concerns over the unit's global reserve currency status.

The dollar could weaken further later in the day, particularly against the risk-sensitive euro, which is also benefiting from stronger share markets, dealers said.

During morning trade in Tokyo, the People's Bank of China-affiliated Financial News reported that China should shift more foreign reserves away from the dollar and into the euro and yen.

The report encouraged Asian hedge funds and other short-term players to sell the US currency for its European and Japanese rivals, dealers said. That sent the euro briefly to $1.5064, refreshing its highest level since August 11, 2008.

Bonds wilt

Bonds were weaker in opening trade on Monday as local markets await the Medium Term Budget (MTBPS) which will be presented in Parliament on Tuesday.

By 10.00am, the short-term government R154 bond was bid at 7.460 percent from a previous close of 7.360 percent. The medium-term R157 was at 8.650 percent from 8.610 percent, while the long-term R186 was bid at 9.250 percent from 9.200 percent.