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Johannesburg - The rand gained ground in morning trade on Wednesday in line with the euro, which recovered against the US dollar, supported by an improved appetite for risk.
A local dealer said that positive US housing and consumer confidence data boosted market sentiment.
At 08:40 local time the rand was bid at R7.3507 to the dollar from R7.3700 at the previous close. It was bid at R9.3473 to the euro from R9.3506 before and at R11.3224 against sterling from R11.3072 at its previous close.
The euro was bid at $1.2718 from $1.2685 overnight.
A trader said: "The rand bounced off the R7.4370 level on Tuesday as the euro recovered its losses against the US dollar amid positive consumer and housing data in the US. For the rest of day, we will be tracking the single currency for direction."
RMB analysts noted in a morning report that the rand started to reflect the concerns over the slowing global economy for the first time on Tuesday - weakening against all the major crosses, with USD/rand pushing to a new high of R7.43.
This could easily have turned into a rout but after a weak start US equities fought back to close sideways overnight - taking some pressure off the rand and leaving USD/ZAR back at the mid-R7.30s.
Risks are clearly heightened by the reattachment to the equity environment.
This are no major problem this morning as the Chinese PMI data came in a little better-than-expected, putting global equities on the front foot.
But event risk is huge, with country-by-country PMI data through the day, culminating in the US figure this afternoon called ISM, the analysts said.
Dow Jones Newswires reports that the yen gave up overnight gains against the dollar and euro in Asian trading on Wednesday, as stronger regional share markets cut into demand for the safe-haven Japanese unit, which was also hit by statements from a highly influential politician favouring direct intervention by Japan.
But amid lingering concerns over the health of the global economy, the yen is unlikely to weaken sharply for the rest of the week, especially ahead of US employment figures on Friday, traders said.