Pound to South African Rand (GBP/ZAR) Exchange Rate Surges after US Military Escalation

Pound to South African Rand Exchange Rate Up on Geopolitical and Oil Jitters

Despite mixed movement in the Pound (GBP) in recent sessions, the Pound Sterling to South African Rand (GBP/ZAR) exchange rate is seeing a strong surge in demand today. Military action caused panic in markets, leaving traders selling the Rand (ZAR) in favour of safer investments.

GBP/ZAR opened this week at the interbank level of 18.35 and has since been trending with an upside bias. While the pair began to slide again yesterday, today has only seen fresh gains amid geopolitical tensions.

At the time of writing on Friday morning, GBP/ZAR is trending closer to the level of 18.71. This was the best GBP/ZAR level since the Pound plummeted on Brexit jitters in mid-December.

Market demand for the Pound (GBP) is limited, but global risk-sentiment is driving currencies towards safe havens and this is causing broad losses in the South African Rand.

Pound (GBP) Exchange Rates Under Pressure as PMIs Print Deeper than Expected Contractions

The Pound (GBP) has seen mixed movement this week, as markets adjusted positions at the end of 2019 and speculate that another year of Brexit uncertainty is ahead.

Demand for the Pound has been weaker since yesterday, as the early-week rebound ran out of steam and Brexit jitters persisted. Brexit is now under a month away, so investors are hesitant to buy Sterling.

On top of Brexit uncertainties, Pound demand has been pressured by the latest UK data. This week’s final December PMI results have indicated that Britain’s economy is contracting even more deeply than expected.

UK construction contracted at 44.4 rather than the forecast 45.9 according to today’s results.

It followed yesterday’s manufacturing PMI, which also showed a deeper than expected contraction. These have left investors more anxious about upcoming services PMI data.

South African Rand (ZAR) Exchange Rates Plunge as Investors Seek Safer Currencies

The South African Rand (ZAR) is a currency that is often correlated to market sentiment regarding risk, trade and emerging markets. As a result, it was one of the currencies by today’s latest global developments.

Overnight, the US military carried out an airstrike in Baghdad, Iraq, ordered by US President Donald Trump. The strike killed powerful Iranian Military Commander General Qasem Soleimani, and analysts expect it will cause tensions to escalate significantly.

Amid the rise in geopolitical fears, investors looked to safe haven currencies like the US Dollar (USD) and currencies more correlated to risk like the South African Rand tumbled.

Prices of oil also surged in response to the news amid concerns about oil production. As South Africa is an oil importing nation, rising oil prices weighed even more heavily on the Rand.

Pound to South African Rand (GBP/ZAR) Exchange Rate Remains Focused on Politics

Even if the Pound’s (GBP) strength is limited, the Pound to South African Rand (GBP/ZAR) exchange rate is gaining as geopolitical jitters cloud the market outlook.

The Pound could still be in for fresh losses in the coming weeks if Brexit uncertainties worsen, but if US military fears worsen or US-China trade tensions worsen again the South African Rand (ZAR) may see the most pressure.

Unless geopolitical concerns lighten, investors are likely to keep buying safe haven currencies and the risk correlated South African Rand will remain weak.

Next week will see the publication of some more notable South African ecostats. The Rand’s support could be boosted if upcoming manufacturing PMI data on Monday or production data on Thursday beat forecasts.

Any notable shifts in oil prices could also influence the Pound to South African Rand (GBP/ZAR) exchange rate outlook in the coming week.

Pound to South African Rand Exchange Rate Up on Geopolitical and Oil Jitters

Despite mixed movement in the Pound (GBP) in recent sessions, the Pound Sterling to South African Rand (GBP/ZAR) exchange rate is seeing a strong surge in demand today. Military action caused panic in markets, leaving traders selling the Rand (ZAR) in favour of safer investments.

GBP/ZAR opened this week at the interbank level of 18.35 and has since been trending with an upside bias. While the pair began to slide again yesterday, today has only seen fresh gains amid geopolitical tensions.

At the time of writing on Friday morning, GBP/ZAR is trending closer to the level of 18.71. This was the best GBP/ZAR level since the Pound plummeted on Brexit jitters in mid-December.

Market demand for the Pound (GBP) is limited, but global risk-sentiment is driving currencies towards safe havens and this is causing broad losses in the South African Rand.

Pound (GBP) Exchange Rates Under Pressure as PMIs Print Deeper than Expected Contractions

The Pound (GBP) has seen mixed movement this week, as markets adjusted positions at the end of 2019 and speculate that another year of Brexit uncertainty is ahead.

Demand for the Pound has been weaker since yesterday, as the early-week rebound ran out of steam and Brexit jitters persisted. Brexit is now under a month away, so investors are hesitant to buy Sterling.

On top of Brexit uncertainties, Pound demand has been pressured by the latest UK data. This week’s final December PMI results have indicated that Britain’s economy is contracting even more deeply than expected.

UK construction contracted at 44.4 rather than the forecast 45.9 according to today’s results.

It followed yesterday’s manufacturing PMI, which also showed a deeper than expected contraction. These have left investors more anxious about upcoming services PMI data.

South African Rand (ZAR) Exchange Rates Plunge as Investors Seek Safer Currencies

The South African Rand (ZAR) is a currency that is often correlated to market sentiment regarding risk, trade and emerging markets. As a result, it was one of the currencies by today’s latest global developments.

Overnight, the US military carried out an airstrike in Baghdad, Iraq, ordered by US President Donald Trump. The strike killed powerful Iranian Military Commander General Qasem Soleimani, and analysts expect it will cause tensions to escalate significantly.

Amid the rise in geopolitical fears, investors looked to safe haven currencies like the US Dollar (USD) and currencies more correlated to risk like the South African Rand tumbled.

Prices of oil also surged in response to the news amid concerns about oil production. As South Africa is an oil importing nation, rising oil prices weighed even more heavily on the Rand.

Pound to South African Rand (GBP/ZAR) Exchange Rate Remains Focused on Politics

Even if the Pound’s (GBP) strength is limited, the Pound to South African Rand (GBP/ZAR) exchange rate is gaining as geopolitical jitters cloud the market outlook.

The Pound could still be in for fresh losses in the coming weeks if Brexit uncertainties worsen, but if US military fears worsen or US-China trade tensions worsen again the South African Rand (ZAR) may see the most pressure.

Unless geopolitical concerns lighten, investors are likely to keep buying safe haven currencies and the risk correlated South African Rand will remain weak.

Next week will see the publication of some more notable South African ecostats. The Rand’s support could be boosted if upcoming manufacturing PMI data on Monday or production data on Thursday beat forecasts.

Any notable shifts in oil prices could also influence the Pound to South African Rand (GBP/ZAR) exchange rate outlook in the coming week.

Josh Jeffery

Contact Josh Jeffery


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