The rand firmed a fraction in the morning session on Wednesday tracking an upbeat euro, amid bullish sentiments coming out of Greece.

At 09:02 the rand was bid at 7.4508 to the dollar from 7.4483 at its previous close. It was bid at 10.4022 to the euro from its previous close of 10.4337 and was at 11.9282 against the sterling from 11.9196.

The euro was bid at $1.3970 from $1.3975 previously.

A local currency trader said: "The rand is firm tracking a stronger euro. If the single currency continues to bounce, we could see the rand hit 7.38, and then 7.28 against the dollar.

RMB analysts noted in their morning report that yesterday the EU made it clear that they would give their formal approval to the Greek budget proposals expected today.

"This isn't a Best Film award, which would be a bail-out for the country but a Best Supporting Actor is enough to take some stress off risky assets after My Big Fat Greek Downgrade by the ratings agencies sent markets into a spiral in December," analysts John Cairns and Nema Ramkhelawan said.

"All this helps: equities, commodities and the EUR are all up ? and January's falls that threatened to turn into a major tumble have slid into the background of investor's minds. US dollar/rand as a result has made progress; yesterday's moves through 7.48 open the way for 7.38.

"The very positive local vehicle sales data certainly helped. The rand though is looking a bit extended relative to its peers. Also be aware that we have a busy day on the data front. Given Monday's international data, the bias must be for positive data. Finally, after a busy day, markets could go into a lull in front of the ECB meeting tomorrow and the US non-farm payroll data on Friday. Resistance is at US dollar/rand 7.5350," Cairns and Ramkhelawan said.

Dow Jones Newswires reported that the euro edged down against the dollar in Asia Wednesday as Japanese players took profits on its overnight rebound, but the common currency could get back on a mild recovery track if euro-zone authorities later temper concerns over the fiscal problems of Greece.

Those concerns have weighed heavily on the euro in recent weeks, but dealers said the European Commission may come out in support of Greece's plans to shrink its budget deficit in an official assessment of those plans due later in the day.

"My feeling is that there's a greater chance that the commission may issue some kind of supportive statements about Greece today, and that would give the euro some support," said Satoshi Tate, a senior vice president in the forex division of Mizuho Corporate Bank.

Most players are reluctant to enter any major bets before the US non-farm payrolls report for January due Friday, dealers said. That is because any signs of improvement in the labour market could fuel speculation of nearer term Federal Reserve interest rate hikes, buoying the dollar.

Economists surveyed by Dow Jones Newswires on average expect the data to show no jobs lost in the month, compared with 85,000 shed in December.

As a prelude to Friday's data, players will be watching an employment report from payroll giant Automatic Data Processing Inc. due later in the day at 13:15 GMT.

Economists surveyed by Dow Jones Newswires expect the report to show 30 000 jobs shed in January, compared with 84 000 lost in December.

Bonds stay strong on short covering

South African bonds continued their recent stronger trend in early trade Wednesday, with traders noting good local and foreign buying interest late on Tuesday.

By 08:40 the short-term government R154 bond was bid at 7.135 percent after closing at 7.155 percent on Tuesday and the medium-term R157 was at 8.270 percent after closing at 8.305 percent previously. The long-term R186 was bid at 9.075 percent from 9.100 percent previously.