A slightly softer rand was quiet in the afternoon session on Monday, in what a local trader called 'a slow grind'.

At 3.35pm the rand was bid at 7.5094 to the dollar from 7.4650 at its previous close. It was bid at 11.2687 to the euro from its previous close of 11.1902 and was at 12.2740 against sterling from 12.1615.

The euro was bid at US$1.5018 from US$1.5002 overnight. A local trader said: "We are seeing stops above 7.55 against the dollar, but it's a slow grind. The range is 7.45 to 7.55.

"Tomorrow's Budget speech may yield something, but for now it is very quiet. The longer-term investors are waiting for 7.80 or somewhere near that level," he said.

Dow Jones Newswire reports that the dollar fell overnight against the euro and remained lower in early New York trading on Monday, after a report in a Chinese central bank-backed newspaper suggested the Asian behemoth should diversify its reserves away from the US currency.

The report, published in the People's Bank of China-backed Financial News on Monday, sent the dollar to its lowest level against the euro since 11 August 2008, though it has since recovered some of those losses.

China's foreign exchange reserves, the world's largest, reached $2.273-trillion at the end of September. How Beijing deploys its holdings is a matter of international interest, especially as China is the largest foreign holder of US Treasuries.

The exact composition of the reserves is unknown, though analysts believe China has started diversifying into non-US-dollar assets in recent years.

Also weighing on the dollar: European Central Bank governing board member and Bank of France Governor Christian Noyer declined to comment when asked about the euro's strength at a financial seminar in Singapore.

That dispelled some concern that eurozone officials could verbally intervene to keep the currency from climbing further, dealers said. European Union leaders meet Thursday and Friday to discuss the Lisbon treaty.

Bonds softer as market awaits MTBPS

Bonds remained on the back foot late trade on Monday as local markets await the Medium Term Budget (MTBPS) which will be presented in Parliament on Tuesday.

By 3.50pm the short-term government R154 bond was bid at 7.435 percent from a previous close of 7.360 percent. The medium-term R157 was at 8.680 percent from 8.610 percent, while the long-term R186 was bid at 9.280 percent from 9.200 percent.

I-Net Bridge