JOHANNESBURG: South Africa's rand was trading weaker above the 8 rand to the dollar level early on Monday, pushed by safe haven buying on fresh fears about the euro zone's debt problems souring appetite for risk.

Analysts expect the currency to trade above 8 rand by the end of the month because of rising Spanish and Italian bond yields and weak first-quarter Chinese growth, which will likely depress the rand.

The rand was down 0.7 percent at 8.01 at 0635 GMT, off a 7.955 close in New York on Friday.

"We have maintained that dollar/rand will target 8.0675 - the January 25 high - on the upside, with the drop to 7.860 attracting in buyers," said Christopher Shiells, emerging markets analyst at Informa Global Markets.

Shiells expected the rand to trade near 8.0 for most of the session, with attention on the rise in euro zone periphery yields.

The 7.86/7 level may form a barrier to any rand gains, while 8 rand provides support.

Later in the week local market focus will turn to inflation and retail sales data due on Wednesday. Initial analysts' expectations are for easing inflation and better growth in the retail sector.

Government's inflation-linked bonds cleared at lower yields on Friday, an indication investors were still keen to hedge their investments against inflation risk.

The benchmark bonds yields were 2 basis points higher. The yield on the 2015 note was at 6.74 percent and that on the 2026 issue at 8.46 percent.