The South African rand trimmed its recent loss on Tuesday after comments from US President Donald Trump indicating the war in the Middle East could end soon, while investors also awaited fourth-quarter gross domestic product data.

At 0742 GMT the rand traded at 16.25 against the US dollar, rebounding from Monday's three-month low of around16.90. 

The risk for further weakness will depend on any escalating global conflict, with distribution risk weighing on the market, as South Africa is a net importer of energy," said Wichard Cilliers, head of market risk at TreasuryONE. 

Oil prices fell after touching a three-year high on Monday following Trump's remarks, reducing pressure on import-dependent economies. 

Lack of clarity on the duration and scale of the conflict will keep markets volatile, with investors taking defensive positions, Cilliers said. 

Statistics South Africa will publish economic growth figures at 0930 GMT, offering clues on the health of Africa's most industrialised economy. 

Economists polled by Reuters forecast 0.3%quarter-on-quarter GDP growth - below the 0.5% recorded in the third quarter - and 1.8% on a year-on-year basis. 

Nedbank economists projected expansion of 0.6% on robust activity in the services sector, which benefited from healthy consumer demand, stronger credit demand and surging trading volume in financial markets. 

The benchmark 2035 government bond strengthened in early deals, as the yield fell 31.5 basis points to 8.38%.