The rand was slightly firmer in midday trade on Thursday, tracking a recovering euro and eying US GDP figures out later.

At 11.45am the rand was bid at 7.8008 to the dollar from 7.8385 at its previous close. It was bid at 11.5064 to the euro from its previous close of 11.5332 and was at 12.8290 against sterling from 12.8418.

The euro was bid at $1.4746 from $1.4720 overnight.

A local trader said: "The rand tested 7.84-85 against the dollar earlier, but failed to reach last night's highs. The euro has recovered slightly, and with US GDP figures out later we should see the rand trade at its current level till then," he said.

RMB analysts John Cairns and Nema Ramkhelawan said in a morning report: "Markets are firmly focused on the outcome of 3Q09 US GDP today. The Reuters consensus forecast estimates a 3.1 percent q/q annualised increase in GDP, though the forecasts range from 1.5 percent to 5.2 percent. While there is considerable debate over the extent to which growth rebounded last quarter, it is clear that the US economy emerged from the depths of recession through a sturdy increase in consumption and modest rise in investment spending.

"A disappointing number could prompt further risk aversion and provide the impetus for further rand losses," the analysts concluded.

Dow Jones Newswires said earlier that if results of US gross domestic product data for the July-September period due at 12:30 GMT disappoint, causing US stock prices to fall even lower, the euro could drop further, dealers said.

"We'd better prepare in case (US) GDP results turn out weaker than expectations," as risk aversion dominates the market, said Keiichi Iguchi, a senior dealer at Resona Bank.

The US economy is expected to have grown 3.2 percent on an annualised basis during July-September, according to a Dow Jones Newswires poll of economists, marking the first growth in five quarters. It contracted an annualised 0.7 percent in the previous quarter.

Meanwhile, the euro fell briefly in Asia to its lowest level against the dollar since Oct. 14. However, it managed to recover later and, at 09:30 GMT, was trading at $1.4748, up from $1.4706 late in New York.

Bonds on front foot

Bonds remained firmly on the front foot in midday trade on Thursday after weak credit extension data that has reignited what had become rapidly waning hopes of one last rate cut before the end of the year.

Producer price inflation for September released on Thursday that was better than what many had expected was also supportive of the bond market.

By 12:00, the short-term government R154 bond was bid at 7.205 percent from a previous close of 7.220 percent. The medium-term R157 was at 8.535 percent from 8.620 percent, while the long-term R186 was bid at 9.130 percent from 9.205 percent.

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