The rand remained range-bound in afternoon trade on Monday.

A local dealer noted light trading volumes, saying market players had adopted a wait-and-see attitude towards the debt woes in Europe.

At 3.41pm the rand was bid at 7.8374 to the dollar from 7.8578 at its previous close. It was bid at 9.6928 to the euro from its previous close of 9.8609 and was at 11.2850 against the sterling from 11.3308. The euro was bid at US$1.2363 from US$1.2533 previously.

A local trader said: "The rand remained pretty much in a range against the US dollar, trading between 7.80-7.90 as the euro lost some ground against the US dollar from Friday. Traders have sort of adopted the wait-and-see attitude as Europe tries to deal with its sovereign debts."

Dow Jones Newswires reports that the euro dropped sharply Monday as fresh concerns over euro-zone economies again came to the forefront after Spain rescued a small, failing savings bank over the weekend.

After strengthening last week as investors unwound trades against the euro, the common currency is starting the week with traders again piling on anti-euro bets.

"An immediate slump leaves the onlooker with the impression that [the euro] may well have fallen out of the wrong side of the bed after a well-deserved nap after a four-year low last week," said Andrew Wilkinson, senior market analyst at Interactive Brokers in Greenwich, Conn.

Monday morning, the euro was at $1.2371 from $1.2583 late Friday, according to EBS via CQG.

Bonds track rand firmer

Bonds were up to 6.5 basis points firmer on Monday afternoon, mainly due to a recovery in the rand. Traders said, however, that volumes were thin.

By noon the short-term government R154 bond was bid at 6.880 percent and offered at 6.860 percent after closing at 6.930 percent on Friday and the medium- term R157 was at 8.115 percent from 8.180 percent at its previous close. The long- term R186 was at 8.970 percent from 9.035 percent previously.