JOHANNESBURG (Reuters) - South Africa's rand tumbled 2 percent against the dollar on Monday and government bonds weakened on soured sentiment stemming from a European Union plan seen as insufficient to contain that region's debt crisis. The rand fell as much as 2 percent to 8.2470 against the dollar, from Friday's New York close of 8.0850. It was last trading at 8.23. EU policymakers on Friday agreed on deeper economic integration but fell short of a convincing plan to deal with a funding crisis undermining the stability of the bloc. "The EU summit was a bit disappointing and consequently risk trades remain tentative," said Brigid Taylor, head of institutional sales at Nedbank. The euro zone debt crisis has been one of the biggest factors influencing the rand in the past months, overshadowing domestic events. The rand is a highly liquid, and relatively highly traded currency seen as a barometer for risk sentiment. The Reserve Bank has said while the rand's volatility is concerning, it was out of its hands to control it. The rand broke through resistance at 8.20 but dealers said thin volumes in the market could also account for its wide gyrations toward year-end. "The rand is now expected to weaken up to 8.28 and retry higher levels toward 8.45 once again," Taylor said. Once the rand breaks through 8.45, it could make a go at 8.61 -- a 2-1/2 year low hit in November, traders said. Government bonds followed the rand weaker, with the yield on the 2015 issue up 6.5 basis points to 6.845 percent and that on the 2026 note going up by the same margin to 8.575 percent. There is little reprieve seen for bonds this week, given that data is expected to show annual inflation pierced through the central bank's 3-6 percent target band in November to hit 6.2 percent.

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