A firm rand was range bound on Tuesday morning but there is very little by way of direction. Governor Gill Marcus is expected to deliver her first Monetary Policy Committee (MPC) press conference later today, however it is expected to have no impact on the spot currency, a local trader said.

At 9am the rand was bid at 7.3764 to the dollar from 7.3484 at its previous close. It was bid at 11.0193 to the euro from its previous close of 11.0150 and was at 12.4012 against sterling from 12.3748.

The euro was bid at US$1.4959 from US$1.4966 overnight.

A local trader said: "There isn't too much happening this morning. The rand is trapped in a range, similar to yesterday, of 7.35-7.45.

"The MPC press conference shouldn't have an impact on the spot currency, although stranger things have happened."

RMB analysts John Cairns and Nema Ramkhelawan in a morning report noted four points to watch for at Marcus' first MPC press conference at 15:00 today - namely the interest rate decision, hints on rate policy going forward, the new governor's stance on the rand, and the schedule of MPC meetings going forward.

"We think that rates will be kept on hold, both because economic data is not yet supportive of a cut - notably inflation isn't yet back in the target band - and because the new governor might want to be careful in sending a message that she is soft on inflation. We'll get new dates for the December meeting (or possibly a cancellation) and also possibly the dates for 2010," the analysts said.

"Governor Marcus will presumably be asked about the "strong" rand in the Q&A. Her history tells us little about her stance on the matter but what we can say is that the institutional thinking is strong and so will probably dominate," RMB said.

The group also alluded to a surprise on policy from US Fed Chairman Bernanke who, in a rare comment on the US dollar (usually the remit of the Treasury), said the Fed would "help ensure that the US dollar is strong".

"Bernanke's rate comments helped US equities push to new highs overnight. Add record highs once again on gold and the rand has been biased stronger ? with euro/rand dipping to 11.00. Trade, however, once again highlights that unless euro/US dollar plays along, a break in US dollar/rand below 7.35 looks difficult," Cairns and Ramkhelawan concluded.

Dow Jones Newswires reports that the euro fell slightly against the dollar and yen in Asia Tuesday as weaker regional share markets and apparently dovish statements from the Australian central bank prompted players to cut exposure to riskier, higher-yielding assets such as the euro.

As most major Asian bourses slumped, with Japan's benchmark Nikkei 225 Stock Average down 0.5 percent in early afternoon trade, players sold the risk- sensitive European currency.

Meanwhile, the dollar benefited from a lack of any new statements on the Chinese yuan in a press conference with U.S President Barack Obama and his Chinese counterpart Hu Jintao following their bilateral meetings in Beijing, dealers said.

Bonds steady ahead of rates decision

Bonds were steady in early trade on Tuesday ahead of new SARB Governor Gill Marcus's first interest rates announcement later in the afternoon.

By 9.12am the short-term government R154 bond was bid at 7.275 percent from a previous close of 7.215 percent. The medium-term R157 was at 8.370 percent, unchanged from its previous close, while the long-term R186 was at 9.035 percent from 9.030 percent before.