The South African rand came under pressure on Thursday, as the latest escalation in hostilities between the United States and Iran pushed oil prices back up and reignited inflation concerns.

At 0635 GMT the rand traded at 16.35 against the dollar, near its previous close as investors held back from making big bets.

The US struck Iran's coastal defences and missile sites on Wednesday after re-imposing a naval blockade of its ports, while Iran threatened to shut off more regional energy exports, saying it was engaged in an "existential war" with America.

The US dollar last traded flat against a basket of currencies, while oil prices rose for a fourth consecutive day on Thursday, with Brent crude futures last trading near a one-month high at $85 a barrel.

"While higher energy costs could pressure South Africa's import bill, the rand's commodity linkage provides a partial offset through improved terms of trade if platinum group metals hold firm," said ETM analytics in a research note.

South Africa's benchmark 2035 government bond was little changed in early deals, with the yield at 8.39%.