The rand gathered further strength against major currencies in afternoon trade on Tuesday‚ boosted by an increase in risk appetite.

"We consider the current rand/dollar movement‚ in particular‚ as the continuation of a recovery given that the local currency has come under a considerable amount of pressure over the last while due to heightened risk aversion associated with the eurozone problems‚" said Mike Keenan‚ sub-Saharan currency strategist at Absa Capital.

At 15:48 the rand was bid at R8.2414 to the dollar from its previous close of R8.2976. It was bid at R10.4132 to the euro from its previous close of R10.4383 and at R12.9265 against sterling from R13.0023 before. The euro was bid at US$1.2640‚ from its previous close of $1.2583.

"All eyes will be on the Federal Open Market Committee (FOMC) announcement in the US later‚ with speculation that quantitative easing of US$600bn could be in the pipeline. International external factors such as the Spanish bond yields and Greek news are still‚ however‚ the main drivers of the rand‚" another local trader said.

Bonds firm on risk-on trade

South African bonds were firm in afternoon trade on Tuesday as investors moved back to "risk-on" trades that benefited emerging market bonds and currencies.

At 15:40‚ the benchmark R157 bond was trading at 6.045 percent from Monday’s close of 6.100 percent. The R207 was trading at 7.285 percent from a previous close of 7.410 percent and the R186 was trading at 8.000 percent from its previous close of 8.130 percent.

The rand was bid at R8.2279 against the dollar from R8.2752 at noon on Tuesday and Monday’s close of R8.2976.