The rand continued to hold up against major currencies in mid-morning trade, despite a growing concern that the recent outbreak of swine flu in Mexico will turn into a pandemic, creating risk aversion which may affect currencies.
The rand continued to strengthen against major currencies, and at 12:00 it was bid at 8.5092 to the dollar from an overnight close of 8.7589.
It was bid at 11.7180 to the euro from a previous 11.4067 and at 12.8892 against sterling from 12.8079.
The euro was bid at 1.3019 from US$1.3019 overnight.
RMB analysts said: "There is not too much to report mid-morning with the rand steady against the dollar. Obviously there is a lot coming out later on in the week, including interest rates, but at the moment, the rand is holding up well."
Earlier, RMB analysts had said in their morning report: "With the election behind us, the main political issue is the composition of the cabinet. The SARB is almost certain to cut interest rates by 100bp on Thursday and the strong ZAR is unlikely to even blink. But there remains uncertainty over how far rates will fall this cycle, with data this week likely to confirm that inflation is only falling slowly towards the target band."
Dow Jones Newswires reports that intensified concern about the spread of swine flu is raising risk aversion and pushing the dollar and yen higher in Europe.
A report in the Wall Street Journal stating that Citigroup and Bank of America have been told by regulators to increase their capital and news from Japan that retail sales fell even more than expected added to the negative sentiment.
The euro, which was already being hurt as a high-yielder, was also undermined by more talk that there may be quantitative easing in the eurozone next month.
Swine fever remained the primary driving force in currency markets as numbers of suspected cases increased and the World Health Organisation raised its pandemic alert to level 4 from level 3 and warned that there is a "significant risk".
Concern about the Japanese economy is also on the rise following new figures showing retail sales fell 3.9% in March from a year earlier, marking the seventh straight month of decline.
