GBP/ZAR Exchange Rate Rises Nearly 1% as UK Unemployment Falls
The Pound South African Rand (GBP/ZAR) is up by nearly 1% today, and is currently trading in the region of R17.993 on the inter-bank market.
The Pound (GBP) further strengthened against the South African Rand (ZAR) today after the publication of the UK average earnings figures for November – including bonus – which increased above expectation to 3.4%.
Tej Parikh, a Senior Economist at the Institute of Directors, commented:
‘The Bank of England will be little moved by today’s data. While the momentum behind wage growth may build support for interest rate hikes, Brexit remains the spanner in the works …’
Confidence in Sterling further improved on the release of the UK ILO unemployment rate figures for November, which showed a better-than-expected decrease to 4.0%.
Today also saw the publication of the UK public sector borrowing figures for December, which increased above expectations to £2.112bn.
The South African Rand, meanwhile, has failed to recover from the South African Reserve Bank’s (SARB) holding of its interest rate last week at 6.75%, and with fewer increases forecast, this has dampened investors’ appetite for ZAR.
With no notable data releases until Wednesday, ZAR is expected to remain weakened against the Pound today.
Pound South African Rand (GBP/ZAR) Exchange Rate Increases as Brexit Stalemate Crumbles
Pound traders were buoyed after Prime Minister Theresa May’s ‘Plan B’ gained some traction after support from some Conservative MPs and the Democratic Unionist Party (DUP).
Furthermore, with the Labour leader Jeremy Corbyn tabling an amendment that would allow more options for MPs over any Brexit deal, such as calling for a second referendum, the Pound has benefited as traders perceive it as breaking the Brexit stalemate.
Theresa May, however, has hit back over suggestions of another public vote, saying:
‘There has not yet been enough recognition of the way that a second referendum could damage social cohesion by undermining faith in our democracy.’
Sterling investors are likely to become increasing cautious with concerns mounting over the Irish backstop, with the EU remaining resolute on the issue.
GBP/ZAR Forecast: Pound Could Weaken on MP Resignations over Brexit No-Deal
GBP investors are likely to have their sights set on Brexit developments this week.
Theresa May is coming under mounting pressure from MPs, who are stacking up against a Brexit no-deal, and with some ministers threatening to resign, this could see a dampening of confidence in Sterling in the coming week.
South African Rand traders, meanwhile, will be looking ahead to tomorrow’s publication of South Africa’s CPI figures for December, which are expected to decrease.
The GBP/ZAR exchange rate is likely to remain sensitive to Brexit developments this week, as tensions increase over May’s Brexit ‘Plan B’ and options open up as Jeremy Corbyn rallies to deter a no-deal, any further signs of division in Parliament could cause the Pound to weaken.