GBP/ZAR Exchange Rate Falls on South African Economic Recovery Hopes
The Pound to South African Rand (GBP/ZAR) plummeted by -1.2% today, with the pairing currently trading around R23.230.
The South African Rand (ZAR) soared after it was reported that approximately 1.5 million workers are set to return to productivity this week. This follows South Africa’s lowering of its lockdown to level four.
As a result, ZAR has benefited over hopes that the South Africa’s economy could recover faster-than-expected, lowering the potential unemployment rate from a previously expected 7 million to 3 million.
James Hamilton, a guest lecturer in corporate and development finance at USB commented on the South African situation:
‘It is imperative that whilst government and private sector remain focused on the immediate response and support required, we lift our heads and look forward towards crafting an integrated recovery and growth plan.’
In South African economic data, today saw the release of the Total New Vehicle Sales report plummet from 33.545 to 574. Meanwhile, car makers are preparing to restart their plants this month.
Pound (GBP) Sinks on UK Lockdown Uncertainties
The Pound (GBP) plummeted against the well-performing South African Rand (ZAR) today. The UK continues to speculate over Downing Street’s plans to ease its lockdown regulations this week.
Meanwhile, the emergency NHS Nightingale hospital is to be put ‘on standby’ as it has run out of patients.
A Downing Street spokesman commented:
‘We view the fact that the Nightingales have not has to be used in a significant way as something that is positive.’
‘We are at a critical moment in the fight against this virus and it it going to be crucial that we get the advice to the public right. If it means taking some extra time to do that, then that’s what we will do.’
GBP’s gains suffered due to growing uncertainty over the British economy. If Downing Street clarifies its lockdown easing proposals, however, we could see Sterling rise.
GBP/ZAR Outlook: Could Sterling Rise After No 10 Announces Lockdown Plans?
Pound (GBP) investors will be awaiting tomorrow’s publication of the final Markit Services PMI. However, if this sinks deeper into contraction territory, then we could see the GBP/ZAR exchange rate fall.
South African Rand (ZAR) investors will be keeping a close eye on South Africa’s economic developments. If economic recovery improves after the nation’s lowering of the coronavirus level, we could see ZAR continue to rise.
The GBP/ZAR exchange rate will be driven by Downing Street’s actions this week. As a result, Sterling could rise if No 10 announces its plans to ease lockdown restrictions and restart the economy.