Pound Sterling to South African Rand (GBP/ZAR) Exchange Unchanged despite Rising SA Unemployment
A surprise increase in the second quarter South African unemployment rate was not enough to give the Pound Sterling to South African Rand (GBP/ZAR) exchange rate an advantage.
Although the unemployment rate edged up from 26.7% to 27.2% in the second quarter this failed to particularly dent the South African Rand (ZAR).
ZAR exchange rates held onto their footing in anticipation of June’s South African trade balance figure, with forecasts pointing towards a widening of the surplus.
This could offer the Rand a fresh rallying point, encouraging greater confidence in the domestic outlook in spite of lingering global trade jitters.
Another disappointing figure, though, would offer the GBP/ZAR exchange rate greater traction.
BoE Interest Rate Hike Likely to Boost Pound Sterling South African Rand (GBP/ZAR) Exchange Rate
Ahead of the Bank of England’s (BoE) August policy announcement the Pound Sterling to South African Rand (GBP/ZAR) exchange rate is likely to see muted momentum.
Markets continue to attach high odds to the prospect of an interest rate hike, something which could give Pound Sterling (GBP) a solid boost across the board.
However, if the BoE ultimately delivers a dovish rate hike this may undermine demand for the Pound in the near term.
Any indication that the central bank is likely to leave monetary policy on hold once again for the foreseeable future would leave GBP exchange rates under pressure.
On the other hand, if the BoE raises any of its forecasts in the third quarter Inflation Report this could encourage the GBP/ZAR exchange rate to make renewed gains.
Further GBP/ZAR Exchange Rate Volatility Forecast on UK PMIs
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate is likely to see some additional volatility in response to July’s UK PMIs.
Evidence that the UK economy is losing momentum could weigh heavily on Pound, particularly if the latest services PMI proves discouraging.
Signs of slowing growth may deter investors, given the high level of uncertainty that still hangs over the economy thanks to the ongoing Brexit negotiations.
Even if the manufacturing and construction sectors demonstrate signs of weakness, though, GBP exchange rates could still strengthen on the back of a solid showing from the service sector.
As long as the economy shows signs of resilience the Pound is likely to hold onto some ground against its more risk-sensitive rivals.
Underwhelming South African Manufacturing PMI to Shore up Pound Sterling South African Rand (GBP/ZAR) Exchange Rate
Another weak reading from the South African manufacturing PMI could offer the Pound Sterling to South African Rand (GBP/ZAR) exchange rate a boost, meanwhile.
As the sector remained in a state of contraction in June investors are hoping to see signs of improvement, although the index is still forecast to remain below the neutral baseline of 50.
If the slowdown in the manufacturing sector continues this is likely to weigh heavily on the South African Rand (ZAR) this week.
A stronger showing, however, may limit any Pound Sterling to South African Rand (GBP/ZAR) exchange rate bullishness.