The South African rand fell more than 1% in early trade on Thursday, after US President Donald Trump vowed more aggressive strikes on Iran, spooking investors who had been betting on a fast resolution to the war.

At 0635 GMT, the rand traded at 17.0250 against the dollar, 1.3% weaker than its previous close. In a prime-time address to the nation late on Wednesday, Trump said the United States would carry out aggressive strikes on Iran over the next two to three weeks and was nearing "completion of its main strategic objectives" in the conflict.

This pushed the US dollar and oil prices higher, dampening demand for emerging market currencies and fuelling inflation concerns in net energy importers like South Africa. 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 had a strong 2025 and had started 2026on the front foot, making it vulnerable to a correction, analysts say.

South Africa's benchmark 2035 government bond was flat in early deals, with the yield at 8.885%.