The rand weakened in noon trade on Tuesday, lagging behind other emerging market currencies amid cautious trading attributed to the delay in the Bharti-MTN deal, said a local trader.

At 11.50am the rand was bid at 7.8025 to the dollar from a previous close of 7.7435. It was bid at 11.2405 to the euro from a previous 11.1685 and at 13.2167 against sterling from 13.1050.

The euro was bid at US$1.4399 from US$1.4419 overnight.

A local trader said: "It's difficult to say why the rand is weaker, having not followed its counterparts in Australia, New Zealand and the UK higher.

"There appears to be some nervousness in the market, and cautious trading perhaps because of the Bharti-MTN deal. Local manufacturing data indicates that we are lagging behind at the moment.

"Having said that, we are in a range of 7.72-85 against the dollar and we should continue in that range until we have some concrete news filter through, perhaps something like the Bharti-MTN deal, and then I think we will see further gains," the trader said.

RMB analyst John Cairns said in his daily report that the international news could hardly be better, but the rand is lagging its counterparts.

Purchasing manager indices from the US and Europe all point to a further stabilisation - or even marginal rebound - in manufacturing activity. The S&P500 pushed past 1000 for the first time since the height of the crisis last year, while EUR/USD finally managed to push past 1.43 to reach new 2009 highs, he points out.

"Our compatriot currencies from Australia, New Zealand, Hungary, Turkey and Brazil have likewise mostly made new 2009 records against the USD - as did the GBP and pretty much everyone else. So why is the ZAR lagging, with lacklustre trading around 7.75?" he asked.

"We can only speculate. Perhaps it's SARB involvement. Perhaps the delay in Bharti-MTN agreeing a tie-up is worrying some - although comments in the media suggest most analysts remain positive about the deal and, in fact, the delay could actually result in larger net inflows.

"More interesting is that while all the global data continues to improve, local data remains uninspiring, our local PMI for instance actually continued to fall in July (in our view only because our local economy always lags the international economy)," he said.

"Whatever the cause, the ZAR has been left behind in the latest rally. There's always scope for a catch-up, so we should assume that the bias remains downwards on USD/ZAR but one just doesn't get the sense that the ZAR is going anywhere quickly. 7.72 now offers mild support. The key level to breach remains 7.64," he added.

Dow Jones Newswires reports that profit-taking is helping the USD higher in most places as investors reassess their recent optimism about the global recovery.

With the Reserve Bank of Australia proving less hawkish than anticipated and new US data unlikely to feed risk appetite, a more subdued performance could be in store.