Rand loses more ground against the dollar

The South African rand was weaker in midday trade on Tuesday, testing the R7.40/$ level on the back of weaker global equities.

A local dealer said the currency market is nervous that the Dow will extend Monday's losses when it opens later in the day. At 11.42am local time local time the rand was bid at R7.38 to the dollar, R9.36 to the euro and R11.39 to the pound. The euro was bid at $1.2675 from $1.2663 overnight.

A local dealer said: "The rand is tracking the global markets weaker. There is a degree of nervousness that the Dow will extend the losses from Monday when it opens later in the day. This tension is all underpinned by fears that the US economic recovering might be losing momentum."

Meanwhile Dow Jones Newswires reports that foreign exchange markets were showing signs of deep unease about the health of the global economy Tuesday, with currencies seen as safe refuges climbing at the expense of riskier bets.

Concerns that the US may be sliding back into recession continue to hamper market sentiment, and steps by Japanese authorities to kickstart the domestic economy have left market-watchers nonplussed.

The result is distinctly nervous trading patterns.