The rand was firmer against the dollar in early morning trade on Friday as risk appetite returned.
The rand was firmer against the dollar in early morning trade on Friday as risk appetite returned.
"We're tracking the euro in a situation where concerns over Greece have eased for now," a local rand trader said.
He added that the expected rand dollar range for the rest of the day had been put at 6.72 to 6.80.
At 08:40 local time, the rand was bid at 6.7476 to the dollar from 6.7605 at its previous close. It was bid at 9.8162 to the euro from 9.8000 before, and at 10.8361 against sterling from 10.8287 previously.
The euro was at US$1.4543 from US$1.4494.
Standard Bank analysts noted in a morning report that the rand had taken advantage of a weaker dollar.
"After Greece's parliament ratified the requisite austerity measures on Wednesday for further debt funding from the EU and the IMF for Greece's debt that matures in July, participants have now turned their focus to interest rate differentials.
"Indeed, with the ECB expected to hike rates again this month, the euro has resumed a firming bias against the dollar."
Standard Bank added that the rand, which remained highly correlated to the euro/US dollar exchange rate, had strengthened accordingly. Although gold, much like the dollar, had lost some of its safe-haven appeal, the rand had also been benefiting from rallying precious metals such as platinum.
Meanwhile Dow Jones Newswires reported that the yen fell against the dollar and euro on Friday in Asia after the Bank of Japan's June tankan survey showed a deeper-than-expected drop in business sentiment in the aftermath of the March 11 disaster.
Dealers said the dollar could rise further if US manufacturing data later in the global day helped to soothe worries about the state of the US economy.
The tankan survey's headline diffusion index plummeted to minus 9 from plus 6 in the March survey, worse than expectations for minus 7 and falling into negative territory for the first time in five quarters.
Improved risk appetite due to receding worries over Europe's debt crisis was another reason behind the weakness in the safe-haven yen, dealers said.
Investors thought the passage of an austerity package by the Greek parliament increased the likelihood that the European Union and the International Monetary Fund would provide aid to Athens at a meeting next week.
US economic data on Thursday also provided a risk-positive factor, with the headline figure in a closely watched survey of Chicago-area purchasing managers at 61.1 in June, higher than 56.6 in May and beating forecasts for 53.0.
"The data helped to lessen investors' pessimism toward the US economic outlook," said Masafumi Yamamoto, chief Japan strategist at Barclays Capital.
Market participants would keep paying attention to US economic indicators to gauge whether the current slowdown in US economic momentum was long-lasting or temporary.
At 14:00 GMT, the Institute for Supply Management was expected to release its US manufacturing index for June, and if the result matched the market's forecast of 51.8, optimism would spread further and the dollar as a result might rise above Y81.0, Yamamoto said. I-NET BRIDGE
