Pound South African Rand (GBP/ZAR) Exchange Rate Slumps Ahead of South African Elections
The Pound Sterling South African Rand (GBP/ZAR) exchange rate has slumped by just over 1% this morning, and the pairing is currently trading at an inter-bank rate of R18.6667.
The Rand’s rally against Sterling comes as voting begins in the South African general election.
Opinion polls suggest that the African National Congress (ANC) will win a majority of 400 seats.
However, analysts have predicted the margin of victory could slide, particularly in major cities.
Sterling (GBP) Slides as Easter Retail Sales Disappoint
Overnight, the British Retail Consortium (BRC) revealed that UK like-for-like retail sales rose by a better-than-forecast 3.7%.
The data showed that there were signs households were becoming less worried about Brexit as Britons splurged in restaurants and bars over Easter.
However this was at the expense of retailers, with data revealing that shops failed to meet expectations over the Easter holidays, which likely dampened sentiment in Sterling.
Commenting on the data, Chief Executive at the BRC, Helen Dickinson, said:
‘Retail sales were below expectation this month as the sunshine over the Easter weekend persuaded many to pursue recreational, rather than retail, activities.’
South African Rand (ZAR) Rallies as Business Confidence Lifts from Seven-Month Low
The South African Chamber of Commerce and Industry (SACCI) revealed South Africa’s business confidence edged up in April from 91.8 to 93.7.
Retail sales and import volumes improved, and this had the effect of lifting sentiment from a seven-month low.
This was the highest the index has been since January, with confidence soothed by an increased focus on the economy in the run-up to the parliamentary elections.
In a statement, SACCI said:
‘The common theme of election manifesto policies among the parties to drive economic growth and job creation seems to resonate well with the markets.
‘Business confidence is likely to be emboldened by a resounding victory of President Ramphosa with the ANC.
‘The outcome of elections should bring more clarity to business and enhance better planning and decision making.’
Pound South African Rand Outlook: Will the GBP/ZAR Exchange Rate Rise if SA Manufacturing Production Disappoints?
Looking ahead to Thursday, the South African Rand (ZAR) could slide against the Pound (GBP) following the release of the South Africa manufacturing production index.
If data reveals that the recent rolling blackouts have had an effect on manufacturing in March, sentiment in the Rand could be hit.
On Friday, the Pound could claw back some of its losses against ZAR following the release of the UK preliminary GDP figures.
If GDP is found to have risen higher than was expected in the first quarter of 2019, the Pound South African Rand (GBP/ZAR) exchange rate could rally as a result, in the absence of any Brexit news moving markets.