Johannesburg - The rand was quiet in the afternoon session, losing only a fraction against the dollar with the local currency set to track US equity markets for further impetus.
At 15:45 the rand was bid at R7.4580 to the dollar from R7.4483 at its previous close. It was bid at R10.4242 to the euro from its previous close of R10.4337 and was at R11.8960 against the sterling from R11.9196.
The euro was bid at $1.3957 from $1.3975 previously.
A local currency trader said: "We have seen the rand pretty quiet since about 10 am this morning. It has come off only a fraction to its current levels.
"US equity markets will be the driver, but I still think that even if the rand heads up to R7.50 against the dollar, it would still signify rand strength."
RMB analysts John Cairns and Nema Ramkhelawan noted in a presentation that much discussion recently had centred on the strength of the rand, how it is damaging the economy and how the authorities should do something about it. However they noted that US dollar/rand was only now back to last year's ranges and was still much higher than previous years.
"Euro/rand has fallen even further but is still much higher than previous years.
"Inflation deflates away the effects of the weaker rand. Higher US dollar/rand over time is justified by the rands's higher inflation rate relative to the US. The same goes for all the other crosses," they said.
The Rand is stronger than historical averages when adjusted for inflation, "but the rand has been at even stronger levels in the past," RMB said.
Earlier, Dow Jones Newswire reported that the euro gained against the dollar on Wednesday after the European Commission accepted Greece's budget-reducing plan, though the common-currency came off its highest levels of the day reached overnight.
Many currency analysts said the acceptance of Greece's plan, in which it detailed how it would strip spending from an over-the-limit budget, had already been "priced in" to the euro, limiting its gains on the report's release.
Early on Wednesday, the euro was at $1.3990 from $1.3964 late on Tuesday, according to EBS via CQG.
The European Commission accepted Greece's plan to slash its budget deficit but warned that further spending cuts and new taxes might be needed to fix the country's public finances.
Greece has pledged to bring its budget deficit below 3% of gross domestic product by 2012, following a shortfall of close to 13% in 2009. Under European Union rules, countries must keep their budget deficits below 3% of GDP.
Investors reacted positively to the commission's acceptance of the Greek plan. The spread between yields on 10-year Greek and German government bonds was between 332 and 338 basis points on Wednesday, down from 353 basis points late on Tuesday.
The euro had gained to an overnight high of $1.4027 ahead of the report, but had given back most of those gains by the time it was released.
"The euro has again had a somewhat muted response to the [commission's] official announcement on the Greek stability plan despite the recovery in the Greek bond markets," said analysts at Brown Brothers Harriman in New York.
- I-Net Bridge