The rand firmed a fraction in the midday session on Monday, tracking euro/dollar play with the former rallying against the greenback.

A local trader suggested however, that a firmer euro might only see a temporary bounce following notable losses against the dollar last week.

At 11:43 the rand was bid at 7.7225 to the dollar from 7.7466 at its previous close. It was bid at 10.5825 to the euro from its previous close of 10.5847 and was at 12.0467 against the sterling from 12.0951.

The euro was bid at $1.3699 from $1.3642 previously.

A local currency trader said: "We saw rand weakness against the dollar, up to 7.85 over the weekend. The US dollar has been noticeably stronger particularly against the euro, and I think that trend is still in tact, despite coming off against the euro a little bit this morning.

"This might only be a bounce following fairly big losses last week, but we will continue to track euro/dollar movement.

"The expected range is 7.67-7.77 against the dollar," the trader said.

RMB analysts noted in their morning report that US dollar/rand's break of its 7.25 ? 7.76 range potentially opens up the way for moves to 8.00.

"This is all a story of Euro/US dollar, which has shed over 10% since its 1.5145 high seen in November. And there seems to be no stopping the adjustment," analysts John Cairns and Nema Ramkhelawan said.

While Greece got begrudging approval for its budget last week and continues to get verbal support from EU policymakers, attention has switched to Portugal and Spain. They noted that fiscal conditions in these countries were not as severe as in Greece but their political will to deal with the problems was lower.

"As a result, futures positioning data shows speculators increasingly turning against the Euro," they said.

"With US dollar/rand now fully attached, every Euro/US dollar move is going to be reflected directly. This implies we are betting on European credit spreads ? a function mostly just of sentiment. We will receive Eurozone GDP data this week and the relative performance of the troubled countries might affect. In this environment, US data seems to be having a smaller impact," RMB said.

Dow Jones Newswires said that in European foreign exchanges, the euro rallied against the dollar Monday, even though investors continued to fret about sovereign debt. At 09:25 GMT, the euro was trading at $1.3706, up from $1.3679 in late New York trade Friday.

The dollar was higher at Y89.46, up from Y89.25.

Bonds steady in midday trade

Despite a softer rand, South African bonds were steady in midday trade on Monday.

By 11:45 the short-term government R154 bond was bid at 7.230% and offered at 7.210% after closing at 7.220% on Friday and the medium-term R157 was at 8.365% after closing at 8.365% previously. The long-term R186 was bid at 9.125% and offered at 9.100% from 9.115% previously.