The rand was weaker in midday trade on Wednesday as the political uncertainty continues to prevail in Europe with the probability of Greece exiting the eurozone raised to 15 percent from 5 percent.
"We are operating much on risk scenario because the euro is under-pressure. It's not looking good for the emerging markets as they seem to be under the spell of global sentiment," a local trader said.
At 11:33 local time the rand was bid at R7.9754 to the dollar from Tuesday's close of R9.9010 and Monday's close of R7.7983. It was bid at R10.3484 to the euro from R10.2639 before, and at R12.8382 against sterling from R12.7580 previously.
The euro was bid at US$1.2980 from Tuesday's close of $1.2992.
Standard Bank said risk aversion remained the order of the day as a light data calendar yesterday, and another today, left markets with nothing to mull over except the on-going ructions in Europe.
"Of particular concern is the failure of Greece to form a new government. This has raised fears that this nation would need to head to the polls again, with the risk that Greece will ultimately exit the eurozone seen to be rising," said the bank.
The bank added that fears of the contagion risk to Greece's more vulnerable EU neighbours, Spain and Italy were adding to the souring in sentiment.
Dow Jones Newswires reported that the euro and other higher-yielding currencies remained under pressure in Asia on Wednesday as political turmoil in Greece continued to fuel concerns about a rekindled European debt crisis.
The single currency failed to get a firm footing above the $1.3000 threshold and stayed just below that mark for much of the Asian day, as failed coalition talks in Greece after elections over the weekend raised the possibility that Athens may not get an international bailout package next month.
"The focus is on the formation of a new government," said Yuji Saito, director of the foreign exchange division at Credit Agricole Bank in Tokyo, as the country will not receive international financial aid if it can't meet a June deadline for the submission of austerity measures.
The euro could stay vulnerable to falls in the near term as protective euro buying to prevent sizable options orders from lapsing at $1.2950 may diminish later this week, Saito said.
"If that point is breached, the euro's fall to $1.2700 could be in sight," he said.
Bonds follow rand weaker
Bonds followed the rand weaker in quiet midday trade on Wednesday.
At noon, the benchmark R157 bond was trading at 6.540 percent from Tuesday's close of 6.480 percent and Monday's close of 6.415 percent. The R207 was bid at 7.660 percent and offered at 7.640 percent from a previous close of 7.580 percent and the R186 was trading at 8.290 percent from its close of 8.225 percent.