Johannesburg - The rand weakened early on Monday and looked likely to come under more pressure this week if domestic economic data comes in weaker than market expectations.
By 08:48, the rand was at R8.8850/$, off an R8.86 close in New York on Friday.
The local currency has traded in a 20 cent range of R8.80 to R9.0 for most of the last month, but this week may give it new direction.
Fourth quarter GDP data is due on Tuesday, which will give a full picture of economic growth for 2012 and also show whether the government's growth projection of 2.7% was too ambitious.
The rand is likely to react negatively to slower-than-expected growth, and may push it through key support at R9/$.
Slowing economic growth has hit revenue collection in Africa's largest economy, widening a hole in the national accounts as government spends heavily to try and stimulate the economy as part of a counter-cyclical fiscal policy.
Finance Minister Pravin Gordhan will announce his budget at 14:00 on Wednesday. A bigger gap in the budget will hit bond yields as the government will need to borrow more from the domestic market.
"Questions around the quantum of bond issuance on the back-end of curve, which has flattened through the previous week with CPI surprising to the downside, and the outlook for the switch auction programme will finally be answered this week with market players expecting some steepness to return to the yield curve," Deon Kohlmeyer, a bond trader for Rand Merchant Bank, said in a note.
Light trade volumes in the bond market are expected to continue until the budget. Dealers are waiting for details of government's programme to switch soon-maturing bonds for longer-dated paper to ease repayments.
Yields were up slightly on Monday morning, at 5.29% on the 2015 note and 7.255% on the 2026 issue .
This week, trade, credit and PMI data are also due on Thursday and Friday.