The rand firmed in the morning session on Wednesday, led by a surging gold price and a stronger euro.

The local currency is strong on the crosses, a local trader noted.

At 9.07am the rand was bid at 7.4100 to the dollar from 7.4446 at its previous close. It was bid at 11.1015 to the euro from its previous close of 11.1326 and was at 12.3220 against sterling from 12.3492.

The euro was bid at $1.4997 from $1.4963 overnight.

Gold last quoted at $11180 an ounce.

A local trader said: "The rand is firmer on the crosses - why? Gold. The emerging markets are doing well amid good performing commodities, while local stocks are also performing solidly.

"The euro is also firmer," the trader said.

RMB analysts John Cairns and Nema Ramkhelawan in a morning report noted a small risk that US dollar/rand may be able to break the bottom end of the 7.35 - 7.62 range today, "but it appears more likely that after another volatile day we will just drift into a quiet end of week stuck in the current range.

"The rand, like other risky currencies, has played catch up and, at 7.42 this morning, seems more reasonably placed given euro/US dollar is again at 1.5000. The ongoing surge in the gold price helps. So too yesterday's confirmation that we are out of recession," the analysts said.

RMB pointed towards today's local CPI figure, which by the group's calculations is set to show inflation dropping to 5.8 percent.

"Some suggest that with the economy still weak, albeit recovering, and inflation back in the target band, another rate cut or even two is justified. We see this as a risk, but not our core scenario; we look for flat rates through 2010 and the first hike in the first quarter of 2011," Cairns and Ramkhelawan said.

"The big risks today are centred at 15:30. Because of the US holiday tomorrow, Thursday's data are squeezed in with the usual Wednesday data, implying four key numbers come out at the same time. Any effect on US dollar/rand would most likely come via euro/US dollar and the all-important 1.5000.

"From a technical perspective, US dollar/rand remains range-bound. Moves above 7.6200 would signal that downside pressures are reducing. The longer-term signals are at important levels, trading below 200 week moving averages, suggesting the 7.000 target still exists," Cairns and Ramkhelawan said.

Dow Jones Newswires reported that the US dollar fell to a seven-week low against the yen in Asia on Wednesday, as fragile Asian stocks prompted speculators to buy the safe-haven yen while Japanese exporters sold dollars for a regular settlement.

The US unit and the European single currency may widen their declines over the coming week if upcoming US data add to expectations for a slower recovery.

Market participants are focused on data to gauge the health of the global economy, dealers said.

Economists polled by Dow Jones Newswires expect personal spending data, due at 13:30 GMT, to rise 0.6 percent in October from a 0.5 percent contraction in September. New home sales, slated for release at 15:00 GMT, are expected to log 398 000 in October, compared with 402 000 the previous month.

Bonds wait on CPI

Bonds were firmer in early trade on Wednesday ahead of key consumer inflation data later in the morning.

By 8.46am, the short-term government R154 bond was bid at 7.355 percent from a previous close of 7.275 percent. The medium-term R157 was at 8.370 percent from 8.415 percent at its previous close, while the long-term R186 was bid at 9.065 percent from 9.095 percent before.