South Africa’s (SA) Rand was steady early on Wednesday as investors watched developments in the Middle East and awaited two ​key United States (US) inflation reports for signals on the Federal ‌Reserve’s policy outlook.

The Rand traded at 16.3050 per Dollar, little changed from Tuesday’s closing level.

The currency found some relief after US President ​Donald Trump said the Middle East conflict could come to ​an end soon, after hitting a three-month low of around ⁠16.90 on Monday.

However, traders remain cautious as Trump continued to threaten ​tough action against Iran over disruptions to energy flows through the ​Strait of Hormuz.

“The Dollar and Rand spike that happened on the escalation of the war appears to be quickly unwinding. If this unwind continues through the remainder ​of this week and next, the Dollar, Rand impact on inflation ​and Gross Domestic Product growth will be limited,” ETM Analytics said in a research note.

The ‌greenback ⁠was flat against a basket of currencies as markets awaited the US consumer price index for February, due later in the day, and the Personal Consumption Expenditures index, the Federal’s preferred inflation gauge ​on Friday.

Like other ​risk-sensitive currencies, ⁠the Rand often takes cues from global drivers, in addition to domestic economic data.

Domestically focused investors this ​week will look to the release of January ​mining ⁠and manufacturing and figures and fourth-quarter current account for clues on the health of the continent’s most industrialised economy.

On the Johannesburg Stock Exchange, ⁠the ​Top-40 index was last up 1.8%.

SA’s ​benchmark 2035 government bond was slightly stronger in early deals, as the yield fell ​1 basis point to 8.425%.

–Reuters–