The rand was softer against the dollar in midday trade on Monday. Dealers said the weekend news that the International Monetary Fund (IMF) had received pledges worth more than US$400 billion to boost its resources had little impact on the market, while concerns about the eurozone had led to safe haven flows into the dollar. 

"The market has moved to a 'risk-off' mode this morning as concerns about France and the Netherlands have dominated the IMF news," a local trader said. 

At 11:44 local time the rand was bid at R7.8662 to the dollar from its previous close of R7.7988. It was bid at R10.3383 to the euro from R10.3101 before, and at R12.6524 against sterling from R12.5981 previously. 

The euro was bid at US$1.3144 from its previous close of $1.3211 after sinking to a two-month low of $1.2993 on April 16. 

Dutch Prime Minister Mark Rutte on Monday convened an emergency meeting of his cabinet after its right-wing parliamentary partner walked out of austerity talks. 

RMB said in its morning report that the rand managed to hold remarkably steady over the last week. 

"While the rand appears to be consolidating at current levels, the risks still stem predominantly from Europe. This weekend's IMF and G20 meetings yielded an additional $400 billion in lending resources, seen as a global firewall. However, concerns remain over how quickly this extra lending will be made available. Reports of delays of up to a year have tempered the optimism the original deal inspired. In addition to the lingering concerns over Europe, a flash manufacturing index out of China that is once again below the threshold 50 level, is likely to further dampen the mood today," the bank said. 

Dow Jones Newswires reported that the euro fell against the dollar and yen on Monday in Asia, following French President Nicolas Sarkozy's poor showing in Sunday's first round of France's presidential vote. Sarkozy came in second to Socialist François Hollande, who garnered 28.4 percent of the vote compared to Sarkozy's 27 percent. 

Attention now shifts to a run-off election between Sarkozy and Hollande on May 6, with some market analysts suggesting victory for Hollande might weaken the euro. 

"There is concern that the policies (Hollande) has been promoting could create friction between other major nations, including Germany," said Masafumi Yamamoto, chief forex strategist at Barclays Capital in Tokyo. 

France has so far conformed to Germany's austerity measures for tackling the European financial crisis, but Hollande has said he would seek to renegotiate the fiscal pact agreed by European leaders late last year. 

European debt worries appear to have receded after finance ministers and central bank governors from the Group of 20 industrial and developing economies said on Friday that they were committed to boosting International Monetary Fund resources by more than $430 billion to deal with the potential fallout from a worsening of the eurozone's debt crisis. 

In data released on Monday, Australia's first-quarter Producer Price Index fell 0.3 percent quarter on quarter, compared with an expected 0.4 percent rise, stoking speculation that the Reserve Bank of Australia would cut interest rates next week. 

Meanwhile, the preliminary HSBC China Manufacturing Purchasing Managers Index, a gauge of nationwide manufacturing activity, reached a two-month high of 49.1 in April compared with a final reading of 48.3 in March. 

The market will be paying attention to the eurozone's PMI data later in the global day to gauge the pace of the global economic recovery. 

Bonds lose ground as rand weakens

South African bonds were up to six basis points weaker in midday play on Monday, mainly on the back of the weaker rand. 

At 11:50, the benchmark R157 bond was trading at 6.510 percent from its previous close of 6.445 percent. The R207 was bid at 7.575 percent and offered at 7.545 percent from a previous close of 7.505 percent and the R186 trading at 8.120 percent from its close of 8.085 percent.