The rand slid against the dollar to just over a month low on Monday and in noon trade continued to track an unsteady euro.
"It's not a pretty picture at the moment," a local rand trader said.
"There has been an enormous loss of confidence in the Eurozone and a terrific sell-off in euros."
The trader added that as well as the problems with Greece, Germany was unhappy about the European Central Bank's intention to buy Spanish and Portuguese bonds.
"The risk is for further rand weakness as our local currency continues to follow the euro."
At 11:34 local time, the rand was bid at R7.3211/$ from its previous close of R7.2771/$. It was bid at R9.9425/€ from R9.9343/€ before, and at R11.5655/£ from R11.5538/£ previously.
The euro was at $1.3602 from $1.3654 before.
Standard Bank analysts said in a morning note that rand bears now dominated on the back of soaring risk aversion.
"The euro has fallen to a six-month low, and risk aversion is high due to mounting fears that Greece will default on some of its debt obligations. This after Greece has yet to achieve the necessary austerity targets that were required for it to get additional financial assistance that was to be used to pay for its maturing debts."
Standard Bank added that equity markets had tumbled, credit spreads were widening, volatility was climbing, and safe-haven assets such as the dollar and gold were rallying.
"The rand has fallen victim to the stronger dollar and risk-off trading environment and, as a consequence, fell to its weakest level in a just over a month against the greenback."
Greece's Finance Minister Papandreou was now looking to implement further tax hikes and spending cuts in an urgent effort to avoid default and keep Greece in the EU.
"However, if the market is not convinced by these efforts, risk aversion is likely to remain high - and the rand could weaken further. Our next upside targets are R7.38, R7.44 and R7.49 but, if risk aversion abates, a retrace down to R7.18 if not 7.14 would be plausible in the short term."
Standard Bank said there were no top-tier local data releases scheduled for today, so rand participants were expected to take direction from how the market responded to Greece's latest austerity measures.
Meanwhile Dow Jones Newswires reported that the euro had been slammed and deserted by investors, as euro-area stresses stepped up a gear amid concerns that Greece might have to default on its debt obligations.
"Over the next two-three weeks Greek's progress will be evaluated with a final report towards the end of September. If Greece does not pass the evaluation it is unlikely to receive the next EUR8 billion bailout payment from the [European Union, European Central Bank and International Monetary Fund] and a Greek default would then be a fact," said SEB.
"Until then fear is likely to be driven yet higher with markets increasingly pricing in a Greek default until proven wrong."
Greece said Sunday it would make €2bn in new budget cuts to meet demands from the EU and the IMF, but that did little to assuage market concerns that the embattled Mediterranean country would not be able to afford its debt payments.
Indeed, German Economy Minister Philipp Roesler was reported as saying Europe could no longer rule out an "orderly default" for Greece as it struggled with a crippling debt crisis.
Adding to the bearish sentiment was the relative lack of action from the Group of Seven leading industrial nations' meeting over the weekend, coupled with the reaction to the surprise resignation of Juergen Stark from the executive board of the European Central Bank.
