The rand remained firm in the morning session on Tuesday as it tracked the euro.

RMB analysts noted real movement in the euro/rand yesterday, having made fresh post-crisis lows down to 10.40.

At 08:27 the rand was bid at 7.4952 to the dollar from 7.4800 at its previous close. It was bid at 10.4282 to the euro from its previous close of 10.4359 and was at 11.9389 against the sterling from 11.9381.

The euro was bid at $1.3922 from $1.3921 previously.

RMB analysts said in their morning report that the January blues had given away to February optimism.

Analysts John Cairns and Nema Ramkhelawan said: "After three weeks of almost solid weakness global markets made a welcome bounce yesterday. This doesn't seem to have the impetus to continue given a lack of data on the events calendar to support. US dollar/rand at least has finally broken its range - although to the bottom side rather than the topside we predicted.

"Technically the way is open for further moves downwards but, with the markets still nervous, it looks like we will settle at new levels in the low 7.50s. The real mover is euro/rand which made fresh post-crisis lows down to 10.40 yesterday," RMB said.

Dow Jones Newswires reported that the euro fell against the yen and dollar in Asia on Tuesday, as the Australian central bank unexpectedly decided to refrain from tightening policy, prodding investors to sell risk-sensitive currencies such as the Australian dollar and the euro.

During afternoon trade in Tokyo, the Reserve Bank of Australia decided to leave its cash rate target unchanged at 3.75 percent, following an unprecedented run of three consecutive hikes in late 2009.

The surprise rate pause made market participants ? who had expected a 25-basis-point hike ? nervous about Australia's economic outlook, prompting them to sell off the Australian dollar and other risk-sensitive currencies, including the euro.

Looking forward, market participants remain alert about downside risks in high-yielding currencies due to lingering concerns about euro-zone governments' fiscal problems, as well as ahead of key events later this week. These include US jobs data for January on Friday, and the meeting of top finance officials of the Group of Seven industrialized countries in Canada over the weekend.

The market is also waiting to see what Paul Volcker, chairman of Economic Recovery Advisory Board, has to say about newly proposed US financial regulations in testimony before the Senate Banking Committee later in the global day.

Bonds remain firm ahead of auction

South African bonds continued their recent stronger trend in early trade Tuesday ahead of the weekly government bond auction later in the morning.

By 08:40 the short-term government R154 bond was bid at 7.165 percent after closing at 7.195 percent on Monday and the medium-term R157 was at 8.300 percent after closing at 8.340 percent previously. The long-term R186 was bid at 9.105 percent from 9.130 percent previously.