Johannesburg - The rand remained weaker against the dollar in noon trade on Wednesday as it tracked a faltering euro and speculation that Greece would default showed no sign of abating.
"The dollar is keeping its strength as safe haven demand increases," a local rand trader said.
"The biggest driver for the rand though is news out of Europe," he added.
The trader said that if the dollar/rand hit 7.45, more rand weakness could be expected while support was currently being found at 7.28.
At 11:50 local time, the rand was bid at 7.3957 to the dollar from its previous close of 7.2886. It was bid at 10.1005 to the euro from 9.9796 before, and at 11.6468 against sterling from 11.4876 previously.
The euro was at $1.3668 from $1.3683 before.
RMB analysts said in a morning note that the dollar/rand was open to large upside moves as political backbiting between eurozone policymakers and setbacks in deploying the second bailout package to Greece, raised concerns of an imminent Greek default, exerting downside pressure on the euro/dollar.
"All the while, Greece's public finances continue to worsen. Chancellor Merkel's attempt to lessen market anxiety, by quashing rumours of a looming Greek insolvency, does not carry much weight as Germany remains resolute in its stance.
"Though reluctant to extend financial support, the implications of a default on the financial system and broader eurozone economy might dissuade Germany from abandoning the periphery right away. Matters should come to a head at the end of the month when Greece requires EUR8bn to pay salaries and pensions," RMB added.
Meanwhile Dow Jones Newswires reported that worries about the eurozone continued to weigh on sentiment. The concerns followed Moody's downgrades of French Banks Societe Generale and Credit Agricole by one notch to Aa3 and Aa2 respectively.
Traders now looked to key economic data releases due later today for further details about the state of the US economy.
Also under close scrutiny would be Greek Prime Minister George Papandreou's conference call this afternoon with German Chancellor Angela Merkel and French President Nicolas Sarkozy.
The call was expected focus on developments relating to the Greek reform programme and the bailout package, a key focus of market participants as the perception of default risk climbed.
