The rand is trading at R6.84 against the dollar in early trade on Thursday as commodity prices rise.
The rand was a tad stronger against the dollar in morning trade on Thursday on the back of high commodity prices.
"It's a high-yielding currency and it's a commodity currency, so there aren't a lot of negatives for it out there," a local currency dealer said.
He put the rand dollar in a range of 6.83 to 6.90 initially.
"After that we may be looking at 6.80 to 6.90," he added.
At 08:45 local time, the rand was bid at R6.8449/$ from its previous close of R6.8820/$. It was bid at R9.5190/€ from R9.5404/€ before and at R11.1775/£ from R11.2173/£ at its previous close.
The euro was bid at $1.3864, unchanged from its close.
Standard Bank head of forex research Michael Keenan said in a note on Thursday morning that Wednesday had been yet another bullish day for the rand, as commodity prices firmed and the dollar remained under pressure amid the tensions in the Middle East and north African region.
"The correlation between the rand and the trade-weighted dollar remains particularly high compared with its long-term average.
"On the other hand, the rand's correlation with the gold price has weakened in recent weeks."
This was still viewed as a function of the current lack of portfolio-related inflows into the resource-laden JSE, Keenan added.
"Nonetheless, the relationship between the rand and gold is still positive, which means that the rand still tends to strengthen (weaken), albeit to a lesser degree, in response to a stronger (weaker) gold price."
Keenan said high oil prices might also be curbing the SA Reserve Bank's (SARB's) appetite for reserves, as had been seen in recent months.
"The rand price of oil is about 800 rand a barrel (the highest level since September 2008), which has worrisome inflation implications.
"It also implies that the cost of funding a short-rand position could become even more expensive later this year if the SARB starts hiking its lending rates (not our base case)."
Keenan added that yesterday's rand strength remained broad-based, which was likely to have been assisted by the enhanced GDP implications of Wednesday's encouraging local vehicle sales data - regarded as a leading indicator for consumer demand.
Meanwhile, Dow Jones Newswires has reported that the euro retreated slightly against the dollar in Asian trading on Thursday after the single currency's surge to a four-month high versus the dollar on Wednesday prompted traders to lock in profits before a key European Central Bank (ECB) policy-setting meeting later in the global day.
The dollar got some comfort as the US stock market finished with small gains even though crude oil prices ended above US$100 per barrel on lingering concerns about the Middle East, giving support to the greenback against the yen at ¥81.60, traders said.
Market participants were keeping a close eye on the ECB's rate-setting meeting and ECB president Jean-Claude Trichet's press conference at 13:30 GMT for clues for the direction of the single currency, with many traders refraining from betting on the outcome aggressively.
"The market has priced in the case that the ECB will shift its policy bias to be hawkish," said Yuji Saito, director of the foreign exchange department at Credit Agricole Corporate and Investment bank in Tokyo.
"If Mr Trichet changes his rhetoric (to be hawkish), the euro will likely keep up its firm tone on heightened expectations for an early rate hike in Europe," he added.
However, Saito said there was also a euro-selling risk if the ECB proved to be less hawkish than expected.
To gauge the ECB's policy shift, traders also focused on whether the ECB would end its unlimited three-month fund supply into the money market.
"We expect Mr Trichet to express the view that upward inflation risks have increased," said Junya Tanase, a currency strategist at JPMorgan.
Meanwhile, if the ECB failed to alter its policy bias, "we may have to be vigilant on the downturn risk on the euro", he added.
Trading lacked a clear direction in Asian trading as investors also waited for key US data, including the ISM Non-Manufacturing report due at 15:00 GMT and US non-farm payrolls on Friday.
