The rand was weaker in afternoon trade on Thursday on the back of a struggling euro and news that Spanish banks will be downgraded.

Worries about the health of Spanish banks weighed heavily on the market in afternoon trade. Media reports said that the share price of ailing Spanish lender Bankia plunged on news that customers had withdrawn EUR1 billion in deposits and Moody's Investor Service planned to downgrade up to 21 Spanish banks.

The rand was weaker in the afternoon because the dollar regained ground and also the news that Spanish banks will be downgraded impacted on the market, a local trader said.

At 15:35 local time the rand was bid at R8.3458 to the dollar, after it touched an intraday best level of around 8.25 and compared with Wednesday's close of R8.3155, Tuesday's close of 8.3275 and Monday's close of R8.1983. Just a week ago the rand was below R8 per dollar.

It was bid at R10.5970 to the euro from R10.5775 before, and at R13.1867 against sterling from R13.2299 previously.

The euro was bid at US$1.2707 from today's best level of $1.2750 and Wednesday's close of $1.2721 and Wednesday's worst level of $1.2680.

Meanwhile, Dow Jones News Wires reported that the euro fell against the dollar in quiet European trading Thursday as investors braced for the next euro-zone-related headline and as uncertainty over Greece continued to cast a shadow over markets.

Dealing volumes were low with parts of Europe out for the Ascension Day holiday, even as equities turned red after a steady start to trading, with banking stocks among the worst performers.

The euro also hit its lowest level against the yen since Feb. 16 as an interim government was inaugurated in Greece ahead of an expected second round of elections on June 17.

Moves in emerging-market currencies were largely dictated by the sustained uncertainty in the euro zone, which kept them under pressure. Strategists noted that the political paralysis in Greece could push the euro above HUF300 against the forint while euro-zone woes also weighed on the Russian ruble and the Czech koruna.

Bonds little change despite weak rand

South African bonds were little changed in afternoon trade on Thursday despite a weaker rand as foreigners provided support.

The weaker rand gives foreigners a cheap entry into our bond market, so we have seen decent demand from them, a bond trader said.

At 15:52, the benchmark R157 bond was trading at 6.450 percent from Wednesday's close of 6.480 percent and Tuesday's close of 6.490 percent. The R207 was bid at 7.645 percent and offered at 7.630 percent from a previous close of 7.680 percent and the R186 was trading at 8.325 percent from its close of 8.350 percent.