The rand was firmer against the dollar in midday trade on Wednesday.
"I'm not sure where this rand strength is coming from but there are plenty of offers on it ... but it may be because of an order and not so much rand strength," a local currency trader said.
"I see a strong close today around 7.01 but in the medium term, I expect a weaker rand," he added.
At 11:36 local time the rand was bid at 7.0552 from 7.0928 at its previous close. It was bid at 9.2055 to the euro from 9.2217 before and at 11.0033 against sterling from 11.0432 at its previous close.
The euro was bid at US$1.3062 from US$1.2995.
Analysts at Standard Bank Research said in a morning note that the rand was still exhibiting a weakening bias. The rand stayed weaker yesterday, courtesy of extended dollar strength and the SA trade balance swinging back into deficit, the group said.
"We still advocate that dollar importers should cover forward and that dollar exporters should hold out for better levels as long as the greenback benefits from its perceived safe-haven status as a result of the debt concerns in Europe and geopolitical tensions in Korea."
RMB currency strategists said in their morning report that while Eurozone problems continue to escalate rapidly, international markets were starting to shrug off these concerns.
"This seems a little strange since the risk that this turns from a Eurozone issue into a global crisis is increased as Spain, Italy and even Belgium and France start coming into market sights. The divergence partly relates to data; US consumer confidence yesterday was the latest in a string of statistics that suggest that the world's largest economy is picking up while China's PMI data this morning shows that the world's second largest economy is continuing to expand at a breakneck pace," the analysts said.
RMB noted that euro/US dollar's tumble to below 1.3000 yesterday was not followed by the other major pairs.
"US dollar/rand epitomises the divergence, actually falling yesterday despite the signal from euro/US dollar, partly on the back of a sudden surge in the gold price.
"This turn is so strong that after having said yesterday that the risk of a panic run on the rand had faded merely into a trend for weakness, today we have to say that even the trend is broken," the group said.
"There is very evident two-way risk this morning. Don't get carried away though ultimately if the Eurozone problems continue to spiral, the rand will be dragged into the storm. As such, the US dollar/rand downside adjustment is unlikely to run very far unless euro/US dollar can bounce for some reason," RMB concluded.
Dow Jones Newswires reported that the euro recovered modestly after a sharp fall Tuesday, but struggled to cover much ground as investor sentiment remained negative due to ongoing concerns about European sovereign debt.
Standard & Poor's decision to keep an eye on Portugal, putting it on negative watch, also weighed on the single currency, it added.
