The South African (SA) Rand was weaker in early trade on Tuesday, as investors remained cautious ahead of a deadline ​set by United States (US) President Donald Trump for Iran to reopen the ‌Strait of Hormuz.

The Rand traded at 16.93 against the Dollar , down about 0.4% from its previous close.

Iran and Israel traded attacks as Tehran ​refused to reopen the Strait of Hormuz and accept a ​ceasefire deal on the eve of Trump’s deadline to ⁠agree to his demands or get “taken out.”

War in the Middle East ​and the closure of the chokepoint in the Persian Gulf have ​sent energy prices soaring, with oil prices currently holding above $110 a barrel.

The Rand has been at the mercy of global market sentiment since the US and ​Israel started the war at the end of February and Iran ​retaliated.

The local currency fell about 6% last month with economists expecting inflation to ‌rise ⁠in the net energy-importing nation.

“Global traders are walking on eggshells at the moment,” said ETM Analytics in a note, adding that further updates on the war will offer directional clarity.

“At face value, it ​still appears that ​the US ⁠and Iran are worlds apart, with neither willing to negotiate on the other’s terms,” said the note.

Domestic ​investors will analyse the March S&P Global Purchasing ​Managers’ Index ⁠for clues on the health of Africa’s largest economy.

The US Dollar was flat against a basket of currencies as global traders awaited minutes ⁠of ​the Fed’s March policy meeting on ​Wednesday, as well as US inflation indicators including the Personal Consumption Expenditures and Consumer Price ​Index data later this week.

–Reuters–