The ship steadied somewhat for the rand in the morning session on Wednesday, tracking a slightly firmer euro.

At 9.03am the rand was bid at 7.7616 to the dollar from 7.8079 at its previous close. It was bid at 11.4295 to the euro from its previous close of 11.4973 and was at 12.7821 against sterling from 12.8290.

The euro was bid at $1.4742 from $1.4716 overnight.

A local trader said: "There are a few rand positives floating about, the euro has firmed, and we are generally back to the levels of Friday, before the yen incident, having tried to break 8.00 against the dollar several times."

RMB analysts John Cairns and Nema Ramkhelawan said that yesterday was better for the rand, US dollar/rand dropping off 8.00 to settle around 7.80.

"This comes despite some decent USD strength, as evidenced also in the EUR/ZAR pullback to 11.50. Gold gains to new highs probably helped, so too the news that Warren Buffett was betting big on the outlook of the US economy. Most of all probably is the fact that we were looking a bit stretched. No longer, with the rand gains we now are more or less in line with our compatriot currencies again," the analysts said.

"Global risk appetite remains the main driver but for the next two days focus shifts to monetary policy. While interest rate hikes might be as much as a year away, the question is already being asked: who will hike first, the Fed or the ECB? Today we should get hints from the former, tomorrow the latter. The exceptionally easy monetary policy of the last year has, of course, dragged the US dollar down," RMB said.

"US dollar/rand 7.65 - 8.00 is the range with trade today centred on 7.80 and mild bias for further downside.

"Apart from the Fed statement late this evening, watch the global service purchasing managers indices, notably the non-manufacturing ISM figure from the US, as well as US jobs figures," Cairns and Ramkhelawan concluded.

Dow Jones Newswires reported that the dollar edged down against the yen in Asia on Wednesday as short-term players sold the US unit ahead of a Federal Open Market Committee meeting later in the global day.

Dealers said the dollar could weaken further later if the closely watched FOMC statement leaves intact language stating that the Federal Reserve will maintain its "exceptionally low" funds rate for an "extended period".

Elsewhere, the euro traded up slightly against the dollar at $1.4735 at 04:50 GMT compared with $1.4721 late Tuesday in New York. The Dollar Index, which measures the currency's value against six major units including the euro, edged down to 76.253 from 76.320.

Rand supports bonds

Bonds gained a little forward momentum in early trade on Wednesday thanks to a healthier-looking rand.

By 9.03am, the short-term government R154 bond was bid at 7.170 percent from a previous close of 7.150 percent. The medium-term R157 was at 8.430 percent from 8.470 percent, while the long-term R186 was bid at 9.035 percent from 9.060 percent.

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