By Janice Roberts
The rand was softer against the dollar in early morning trade on Monday as it tracked a euro that was flat against the greenback.
The local currency was also awaiting the release of the SA reserve Bank Quarterly Bulletin.
"The market is all very neutral and there's nothing really going on at the moment," a local currency trader said.
"We're likely to carry on just following the euro," he added.
"Dollar-rand and euro-dollar don't look like they have a clear direction at the moment."
The trader put dollar-rand in a range of R7.53 to R7.63 for the initial part of the trading session.
"But let's wait to see reaction to the current account data in the SARB bulletin," he added
At 8.35am local time, the rand was bid at R7.5608/$ from its previous close of R7.5440/$.
It was bid at R9.9629/€ from R9.9539/€ before, and at R11.9825/£ from R11.9906/£ previously.
The euro was bid at US$1.3169 from its previous close of US$1.3175.
Standard Bank said in a note that the rand had strengthened against the dollar on Friday, partly due to less dovish statements from Reserve Bank Governor Gill Marcus.
"She suggested that inflationary pressures in South Africa were becoming more generalised - something that was widely interpreted as suggesting a rate hike sooner than previously anticipated."
The rand had also been assisted by a slight weakening in the dollar in the wake of earlier adjustments in expectations of further monetary easing.
With neither standout features on the international calendar nor central bank meetings this month, the rand could well start taking more direction from local data, in contrast to its recent moves, Standard Bank said.
"Today's Q4 current account balance is likely to be of great interest. The consensus is for a slight widening, which would be negative for the rand's fundamentals".
A survey of eight leading economists by I-Net Bridge has pegged the current account deficit at -4.3% of GDP from the -3.8% deficit in the third quarter.
The forecast range for the expected deficit varied from -3.4% to -5.0% of GDP.
Meanwhile Dow Jones Newswires reported that the dollar had stabilised versus the yen and the euro on Monday in Asia after losing ground on Friday following lower-than-expected US consumer-sentiment and industrial-production data.
The dollar remained range-bound versus the yen and euro amid a relative lack of trading cues, with many Tokyo market participants away ahead of a Japanese national holiday, dealers said.
Despite Friday's weak data, most US economic indicators had shown signs of recovery and near-term sentiment toward the dollar remained bullish, with the focus now on US Treasury yields, Tokyo dealers said.
"Though Friday's data were weak, recent firming in US economic indicators are sparking bullish sentiment toward the dollar/yen," said Osao Iizuka, head of FX trading at Sumitomo Trust & Banking.
The benchmark 10-year US Treasury yield was expected to rise to 2.50% by mid-2012 as overseas central banks scaled back buying, said Junya Tanase, chief foreign exchange strategist at JP Morgan Chase Bank in Tokyo.
As well, long-term yields tended to climb in the weeks after breaking out of a range, he said.
Tanase said a correlation has been observed in the last three months between the dollar/yen and the 10-year Treasury yield, noting that a 2.50% yield suggested the dollar would trade around ¥86.00.
Sumitomo Trust's Iizuka said that if stop-loss selling orders placed below ¥83.00 were triggered, the dollar could fall to a ¥82.60-¥82.70 band.
But bids from major buyers such as Japanese importers were likely to prevent sharper falls, he said.
