South Africa's rand softened against the dollar on Monday and could remain on the back foot as prospects of less monetary stimulus in the United States boosts the greenback.
At 0657 GMT the local currency was 0.27% weaker at 8.5885 to the dollar after closing Friday's session at 8.5651.
The dollar remained on a firmer footing overall after surging last week, when minutes from the December meeting of the US Federal Reserve showed some policymakers had mulled ending their bond-buying programme as early as this year.
Manufacturing output numbers on Thursday could shape market expectations for the local central bank's call on domestic interest rates later this month, traders said.
"We still remain short rand across the board still with one eye on this month's monetary policy committee meeting where a surprise cut could add to cyclical rand weakness," said Standard Bank trader Warrick Butler.
"For the day, continue to play the 8.55 to 8.65 range with things becoming a little clearer hopefully as we head into the remainder of the week."
The short-term money market is pricing in a small chance of another rate cut this year to help boost flagging growth.
The South African Reserve Bank kept rates on hold for most of 2012 due to upward risks to the inflation outlook, reducing them by 50 basis points only in July.
Government bond yields were softer in early Monday trade, with the 14-year benchmark and shorter-dated 2015 issue each shedding 2 basis points to 7.355% and 5.375% respectively.
The Treasury will resume weekly bond auctions on Tuesday after a three-week hiatus, offering R2.1-billion worth of debt to primary dealers.