S.Africa's rand, bonds retreat as rally loses steam ahead of rates decision

JOHANNESBURG (Reuters) - South Africa's rand retreated on Friday, giving up gains driven by a recent set of local data showing momentum was returning to the economy, as investors pocketed profits ahead of next weeks' interest rates decision. * At 0650 GMT, the rand was 0.24 percent weaker at 12.4800per dollar, having closed at 12.4500 overnight in New York. * The offshore session saw the currency rally initially,reaching a new 20-month high of 12.4325 before retreatingslightly as dollar demand increased. * A Reuters poll of 30 analysts on Thursday found that therand's rally, which has seen the currency gain nearly 10 percentsince January, had probably run out of steam and would behobbled by a return of local political issues. * Reuters poll also predicts the South African Reserve Bankwill keep benchmark lending rates on hold at its March 30 policyannouncement. * Stocks were set to open flat at 0700 GMT, with the JSEsecurities exchange's Top-40 futures index unchanged from theprevious session * In fixed income, the yield for the benchmark governmentbond due in 2026 was flat at 8.34 percent, retreating from17-month lows as investors saw value diminishing. (Reporting by Mfuneko Toyana)