The rand gained some traction in the afternoon session on Tuesday tracking US dollar/euro play, while eyes move to a flurry of economic data in the US including GDP figures.

At 3.30pm the rand was bid at 7.4551 to the dollar from 7.4980 at its previous close. It was bid at 11.1751 to the euro from its previous close of 11.2029 and was at 12.3630 against sterling from 12.4473.

The euro was bid at US$1.4970 from US$1.4959 overnight.

On the local front, South Africa's real gross domestic product (GDP) at market prices on a quarter-on-quarter (q/q) seasonally adjusted annualised (saa) basis rose by 0.9 percent in the third quarter of 2009 from a revised -7.4 percent (?6.4 percent) in the first and a revised -2.8 percent (?3.0 percent) in the second quarter, Statistics South Africa (Stats SA) data showed on Tuesday. However this data had very little impact on the rand.

A local trader said: "We have seen rand strength throughout the day, with support coming in at 7.45-46 level. The rand's strength is purely based on dollar/euro movement."

The trader pointed to raft of economic data expected out in the US later today.

Earlier, Dow Jones Newswires said that risk sentiment dominated the European trading session on Tuesday, with an overnight slump in Chinese shares boosting the dollar - a favoured currency in times of stress.

For the euro, some support came from the closely watched Ifo index of German business sentiment. The key index rose to 93.9 in November, from 91.9 in October, and comfortably ahead of expectations for a reading of 92.6.

"Obviously, German industry is bouncing back," said Carsten Brzeski, an economist at ING Financial Markets in London.

"Not all that glitters is gold and particularly weak private consumption should give policymakers some headaches," he warned. "Nevertheless, the German economy holds many aces to outdistance most other eurozone countries for some time."

The data helped to support the euro's bounce back above $1.49 against the dollar.

There is plenty of potentially market-moving economic news. Second release of GDP is at 1.30pm GMT, Case-Shiller house price index at 2pm GMT, consumer confidence at 3pm GMT and FOMC minutes at 7pm GMT.

Bonds off worst after auction, GDP

Bonds were well off their worst levels of the day by the late afternoon on Tuesday as a positive GDP number and post auction buying set in.

However, the market remained around four basis points weaker on the whole as a slight negative undertone persists. The cover ratios on the day's big R1.7-billion rand R209 bond auction was well below two times bids, reflecting some crowding out. Cover ratios in SA should be around 4.5 times to be seen as healthy.

By 4.23pm the short-term government R154 bond was bid at 7.335 percent from a previous close of 7.230 percent. The medium-term R157 was at 8.415 percent from 8.370 percent at its previous close, while the long-term R186 was at 9.120 percent from 9.050 percent before.