Johannesburg - The rand was steady in morning trade on Friday and set to remain range-bound for the rest of the day.
"With half of South Africa on holiday, it should be quiet and we expect the rand dollar to stay in a range of R6.78 to R6.86," a local currency trader said.
At 08:26 local time the rand was bid at R6.8341 from R6.8238 at its previous close. It was bid at R9.0847 to the euro from R9.0489 before and at R10.6598 against sterling from R10.6765 at its previous close.
The euro was bid at $1.3309 from $1.3239.
Dow Jones Newswires reported that the dollar had declined against the yen and the euro in Asian trading on Friday, with investors unwinding positions ahead of the weekend as recent rises in US Treasury yields showed signs of easing.
"Investors have piled up large dollar positions in recent days in expectation of the US unit's ascent as bond rates rose."
The benchmark 10-year Treasury bond yield touched 3.568% on Thursday in New York, a level last seen May 13, but then began to edge back down, reaching 3.424% as of 04:10 am from 3.440% at 00: 10 am, Dow Jones said.
Despite coming off its recent highs, the dollar was unlikely to fall sharply against the yen as Japanese importers were likely to step in on any dips, said Sumitomo Trust & Banking's head of foreign exchange trading Osao Iizuka, who said the dollar's downside would be supported at ¥83.50 for the rest of the day.
Dealers said the dollar may resume rising if US bond yields extended their gains on the back of further signs of a US economic recovery.
"Most US economic indicators have been strong lately, and the exception was the non-farm payrolls (released early in December)," Iizuka said. "If good numbers come from employment-related indicators, that would fuel the dollar-bullish view."
Dow Jones added that investors were paying close attention to developments from the European Union summit ending later in the day for clues on how leaders were going to deal with European sovereign debt concerns, but some said any tangible developments from the summit were unlikely.
"I expect nothing new," said Toshihiko Sakai, senior dealer at Mitsubishi UFJ Trust and Banking.
He said that without any drastic changes in policy, concerns over sovereign debt would continue to weigh on the common currency. But he said the euro was unlikely to fall below $1.2969, its low marked on November 30, for the remainder of this year as most players wanted to avoid making large bets ahead of the Christmas holidays.