The rand tracked a firmer euro in the morning session on Monday, with the local currency set to continue that trend throughout the day amid local trade data expected out later.

At 8.55am the rand was bid at 7.3738 to the dollar from 7.3500 at its previous close. It was bid at 11.0925 to the euro from its previous close of 11.0418 and was at 12.2110 against sterling from 12.1570.

The euro was bid at $1.5057 from $1.5009 overnight.

A local trader said: "We are tracking a firmer euro which appears to have forgotten its troubles from Friday. We are stronger on the crosses, and should target 7.32 against the dollar.

"Local trade data is expected later today," he said.

RMB analysts John Cairns and Nema Ramkhelawan in a morning report noted that the Dubai mini-crisis was not completely over.

"Weekend news that Abu Dhabi will only selectively bail out debts and that the UAE Central Bank will inject liquidity into the banking system has been seen as the bare minimum that the authorities could do.

"Still, Asian stocks have followed Wall Street's lead and are bouncing back. So too are risky currencies. What stands out here is that while the other currencies still linger way off their best, US dollar/rand is right back at 7.35 this morning. Admittedly euro/US dollar is testing up at 1.5100 again but there seems no obvious reason for the local outperformance," the analysts said.

"This probably reduces the risk of a break lower, but once again our correlation with euro/US dollar is extreme and quite simply further US dollar weakness will see US dollar/rand lower."

RMB pointed to local trade data at 2.00pm today. "We then get purchasing managers indices from across the world tomorrow. Perhaps the key event of the week will be the ECB news conference on Thursday.

"Signals are that the ECB wants to normalise policy - reversing its monetary injections on the way to raising rates - keeping upward pressure on euro/US dollar. We end the week with the all-important US employment figures as well as the draw for the World Cup," Cairns and Ramkhelawan said.

Dow Jones Newswires reported that the euro rose against the dollar and yen in Asia on Monday, as players bought back the unit after concerns over the Dubai debt issue eased due to the United Arab Emirates central bank's decision on Sunday to offer liquidity.

But dealers said the euro's rebound could stall in the coming days as investors remain hesitant to bet strongly on such riskier assets before confirming the fallout from the Dubai debacle will not worsen.

The UAE central bank's move boosted players' willingness to buy riskier assets in Asian trading on Monday, triggering the purchase of the euro by Asian sovereign funds and sending it to as high as $1.5085 during the session, dealers said. The rise got steeper after stop-loss buying orders around $1.5000 were triggered, they added.

"At the moment, the Dubai issue appears more stable to the market than it did on Friday, said Jun Kato, deputy general manager at Shinkin Central Bank.

Bonds bid slightly stronger

Bonds were three basis points stronger in early trade on Monday as they took direction from a steady rand. The market did not show too much reaction to credit data, apart from being bid a little stronger as credit extension hit negative territory.

By 9.07am, the short-term government R154 bond was bid at 7.335 percent from a previous close of 7.305 percent. The medium-term R157 was at 8.425 percent from 8.455 percent at its previous close, while the long-term R186 was at 9.140 percent from 9.160 percent before.

I-Net Bridge

Caution: Recovery ahead SA's economic recovery will not be a fast process, Finance Minister Pravin Gordhan said.

The wolf leaves the door Although SA has crawled out of the recession it doesn't mean an early Christmas for consumers.

Brace for bleak Christmas A bleak Christmas is predicted this year, particularly for the retail industry.