Rand drops more against the dollar

The rand was on the back foot in midday trade, weighed down by a weaker euro versus the dollar, and a decline in the seasonally adjusted Kagiso Purchasing Managers' Index.

A local trader said that emerging market currencies such as the rand have come under renewed pressure amid rising risk aversion as concerns over the eurozone debt crisis resurface.

At 11.41am the rand was bid at R7.76 to the dollar, R9.42 to the euro and R11.22 to the pound. The euro was bid at $1.2123 from $1.243 previously.

The seasonally adjusted Kagiso Purchasing Managers' Index (PMI) declined for the third consecutive month in May, falling by another 4.1 index points to reach 51.1 in May from 55.2 index points in April.

The Dow Jones Newswires reports that the euro fell to a new four-year low against the dollar Tuesday as concern over euro-zone banks, euro-zone sovereign debtors and the future of Angela Merkel's coalition government took their toll.