The rand was softer against the dollar in early trade on Thursday as uncertainty and volatility plagued markets.
"I think the rand may settle down later," a local rand trader said. "And US non-farm payrolls out tomorrow might help settle markets," he added.
For the morning session, he put dollar/rand in a range of 6.72 to 6.82.
At 08:34 local time, the rand was bid at R6.7610/$ from its previous close of R6.7157/$. It was bid at R9.6618/€ from R9.6313/€ before, and at R11.0457/£ from R11.0367/£ previously. The euro was at $1.4307 from $1.4342.
RMB said in a morning note that a late rally had resulted in US equities finishing in the positive - for the first day in eight.
"The relief helped all risky assets, with USD/ZAR trading off a high around 6.84 to reverse all the way to 6.70. The outlook remains for choppy two-way trade - but it is the blowout risk that continues to haunt us."
RMB added that last night's US rally was being described as nothing more than a technical bounce.
"There isn't much in the way of economic news to get excited about; yesterday's service ISM data confirmed what Monday's manufacturing data suggested - the pace of US economic growth has dropped back to around 1.5%.
"The key point is that the concerns over the global economy and the ongoing problems in the PIIGS have not disappeared and so the risk of a ZAR blowout remains in play."
RMB added that the big news in the currency markets yesterday was the intervention by both the Swiss and the Japanese to try to halt the "safe haven" gains in their currencies.
With regard to the rand, RMB said the currency had "historically blown out" around one year in every three.
"In 2008 when the subprime crisis was brewing, the ZAR remained oblivious to the deterioration in global markets. It traded so strong that we invented the term 'Super ZAR'. We all know how that turned out in the end.
"In 2008 the key term for emerging markets was 'decoupling', i.e. could they escape the weakening economies and the financial stress of the core economies? The answer turned out to be no. We're about to have the same conversation again."
RMB said a key market to watch would be South African bonds.
"Usually the ZAR drives bonds, through its effects on inflation, but things could reverse; foreign inflows and falling yields show investors see South Africa as a safe haven play from developed world stress, rising yields would signal that South Africa is being lumped back into the risky asset basket."
A major reason why SA hadn't experienced a ZAR blowout was aligned with the core view that Italy was fundamentally solvent - unlike Greece.
"What we have to fear is fear itself; rising yields increase debt funding costs, which raise fears of solvency, pushing up yields and so on," RMB said.
Meanwhile Dow Jones Newswires reported that after days of fretting publicly over the strength of the yen, Japanese authorities intervened in foreign exchange markets Thursday to let some air out of the lofty currency.
The intervention wasn't unexpected, but the timing took some by surprise as it came at the outset of what was to be a two-day policy meeting by the Bank of Japan. It also came as the yen was holding steady against its rivals, even though Japanese officials had said repeatedly that they were looking for signs of yen volatility or sharp, one-sided movements.
The US dollar and euro jumped sharply higher against the yen while the Bank of Japan abruptly shortened its policy meeting, announcing it would now be limited to a single day and would wrap up Thursday afternoon.
That has stoked speculation that the central bank would announce policy-easing measures aimed at further diluting the yen.
Japanese authorities have eyed the strengthening yen with growing alarm in recent weeks as debt problems in the US and euro zone have lessened the appeal of the yen's main rivals and boosted its value, along with that of the safe-haven Swiss franc.
In contrast to March's coordinated intervention by G-7 authorities to weaken the yen, Japan was acting alone this time, though it did consult with other countries before moving.
The dollar also rose against the euro and Swiss franc after Tokyo's dollar-buying. That move was sure to be welcomed by Swiss National Bank officials, who announced aggressive easing measures Wednesday only to see the dollar return to CHF0.7644 in New York trading, close to where it was before the announcement.
Looming in the background were intensifying worries about the spread of euro zone debt problems as Italy's borrowing costs hit an all-time high Wednesday.
