A softer rand was at the mercy of international markets by midday on Tuesday, according to a local trader.

At 12.30am the rand was bid at 7.9330 to the dollar from 7.9680 at its previous close. It was bid at 11.6300 to the euro from its previous close of 11.7656 and was at 12.9340 against sterling from 13.0667.

The euro was bid at $1.4662 from $1.4773 overnight.

"We are tracking international markets at the moment. We are seeing quite a lot of export activity, and are at the mercy of international markets," a local trader said.

Dow Jones Newswire said that the pound grabbed the market's focus yet again in European trading hours on Tuesday, tumbling to reflect fresh nerves over the health of UK banks, while the dollar has lacked direction.

The euro spiked from the GBP0.9030 area to a high of GBP0.9061 before reversing the gains as the single currency fell against the dollar.

More broadly, the US dollar wasn't showing clear direction, in a quiet session without key data releases. The currency gained sharply against the euro, but fell a little against the yen. Analysts said choppy, directionless moves are likely to persist for now ahead of a string of crucial central bank meetings that lie ahead this week.

The US Federal Reserve announces its latest monetary policy decision Wednesday, followed by the Bank of England and the European Central Bank Thursday. "There is a sense that market participants are waiting for [these meetings] before serious action resumes," said analysts at Brown Brothers Harriman.

"The dollar is climbing against everything aside from the yen at the moment because of general nerves about risk," said Daragh Maher, a senior currencies analyst at French bank Calyon in London. "However, the move doesn't seem to have much conviction, so it will likely reverse again later."

Bonds hover

Bonds remained static during the morning session on Tuesday despite a fairly well bid government auction. A local dealer said the market was now keeping a close watch on the rand.

By 12.05am, the short-term government R154 bond was bid at 7.225 percent from a previous close of 7.150 percent. The medium-term R157 was at 8.490 percent from 8.470 percent, while the long-term R186 was at 9.105 percent from 9.060 percent.

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