The rand tracked a firmer dollar in midday trade on Tuesday, ahead of the mini budget speech later in the day.

At 11.53am the rand was bid at 7.5798 to the dollar from 7.5820 at its previous close. It was bid at 11.2810 to the euro from its previous close of 11.2790 and was at 12.4350 against sterling from 12.3627.

The euro was bid at $1.4880 from $1.4869 overnight.

A local trader said: "The market is waiting for the afternoon Budget speech. The dollar is firmer across the board so we are testing highs with activity at 7.62 against the greenback."

RMB analysts John Cairns and Nema Ramkhelawan said in a morning report: "Locally, SA Finance Minister Pravin Gordhan will deliver his maiden Medium Term Budgetary Policy speech later this afternoon. While we expect a sizeable revision to the budget deficit, the statement is unlikely to provide any revelations with regards to the rand.

"Although the Minister Gordhan might comment on the local unit's recent strength and allude to possible measures to curb its effect on the economy, the implementation thereof seems unlikely at this stage. US dollar/rand might exhibit volatility during the address but should not move significantly in response to the statement," Cairns and Ramkhelawan said.

Earlier, Dow Jones Newswire reported that the dollar rose to a fresh five- week high against the yen before losing some of its gains in Asia on Tuesday, as long-term US interest rates remained on an uptrend and a downturn in share prices raised demand for the safe-haven US currency.

"The trend is still for the dollar's upside," said Hideki Amikura, a senior dealer at Nomura Trust and Banking.

With the gap between US and Japanese interest rate being one significant mover of currencies, market participants are focused on a series of US government debt auctions this week totalling $123-billion in value, including a sale of $44-billion, two-year notes later on Tuesday.

Bonds maintained their cautious tone in quiet noon trade on Tuesday ahead of the Medium Term Budget Policy Statement (MTBPS) to be presented in Parliament later Tuesday afternoon.

By 11.50am, the short-term government R154 bond was bid at 7.450 percent from a previous close of 7.410 percent. The medium-term R157 was at 8.725 percent from 8.700 percent, while the long-term R186 was bid at 9.340 percent from 9.305 percent.

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