The rand was steady around its previous closing levels against the US dollar and firmer against the crosses in early trade on Monday, confined to its recent trading range despite a weak euro.

At 09:00 the rand was bid at 7.5666 to the dollar from 7.5774 at its previous close. It was bid at 10.5148 to the euro from its previous close of 10.5300 and was at 12.0732 against the sterling from 12.1144.

The euro was bid at $1.3887 from $1.3874 previously.

RMB analysts said in their morning report that the USD/ZAR will be very lucky if it can avoid pushing upwards out of its 7.54-7.66 range and past 7.72.

"Various pressures are evident. Most importantly, EUR/USD continues its slide. Greek fears are weighing and fiscal concerns are now extending to France. US 4Q09 data was surprisingly positive, rising 5.7 percent q/q, showing quite clearly that the US is going to be the outperformer in the economic recovery," they said.

Commodities are also taking a beating - January being their worst month since the middle of the Lehman's storm. Policy risks are also evident. Locally it seems that the debate about inflation targeting will take many months to play out but global markets have been rocked by suggestions by the UK authorities that they might try to curb carry trades

"USD/ZAR managed to avoid all this Friday - helped perhaps by the excellent local trade data - but the pressure is likely to take its toll as the week progresses," they said.

Dow Jones Newswires reported the euro is slightly higher against the US dollar and the yen, enjoying a little bounce on bargain hunting after sharp losses last week but retaining its bearish bias.

But analysts view the euro's outlook as grim for now.

"No one wants to own euros right now," said Kathy Lien, director of currency research at GFT Forex in New York. "No one believes Greece is able to solve its problems, and recent initiatives won't be enough to turn around their fiscal situation."

Some investors believe the European budget issues will persuade the European Central Bank to keep interest rates low for even longer than anticipated, in contrast to the emerging investor consensus surrounding the U.S. Federal Reserve. This could further add to pressure on the euro, which has fallen 1.8 percent last week against the dollar and 3.1 percent since the beginning of the year.

"The euro is really the anti-dollar, so what's good for the dollar is necessarily bad for the euro," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York.

"The euro is overvalued against many currencies, including the US currency. The dollar was unfairly handicapped by zero interest rates and the consequent carry trade that had emerged," he said, referring to trades when investors borrow cheaper dollars to fund purchase of riskier assets.

Bonds steady in quiet trade

South African bonds were steady in quiet trade on Monday, with little in the way of fresh news to offer direction.

By 08:55 the short-term government R154 bond was bid at 7.235 percent after closing at 7.230 percent on Friday and the medium-term R157 was bid at 7.385 percent after closing at 8.380 percent previously. The long-term R186 was bid at 9.175 percent from 9.165 percent previously.