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Johannesburg - Concerns about South Africa's deteriorating trade and budget deficits are expected to weigh on the rand and bonds this week, with the market keeping an eye on a debt sale and producer inflation data due on Tuesday.
The rand was at R9.0654 to the dollar at 06:34 GMT, 0.2% firmer than its close in New York on Monday.
It breached the R9.0 level last week after a record trade deficit of R24.5bn was reported for January, from R2.7bn in December.
A bond auction at 09:00 GMT should give an indication of demand for government debt after Finance Minister Pravin Gordhan forecast a wider budget deficit for 2013/14 in his budget last week and announced an increase in domestic debt issuance.
South Africa will issue R2.1bn in total of its 2026, 2041 and 2023 bonds.
The yield on the 2026 government bond was flat at 7.375% and that on the 2015 paper was down 1 basis point at 5.335%.
"Given the aforementioned vulnerability of the exchange rate and the increased issuance profile announced at last week's budget, we believe the risk lies in a further bear steepening of the yield curve over the coming weeks," Absa Capital said in a note.
