Pound to South African Rand Exchange Rate Rebounds but Brexit Fears Weigh on Appeal
Update 16:40 BST 22/07/2020:
The Pound to South African Rand (GBP/ZAR) exchange rate continued to fluctuate this afternoon.
Fresh concerns about the global coronavirus outlook kept market risk-sentiment limited. Poor South African retail sales results also weighed heavily on the Rand.
Due to these factors, GBP/ZAR was able to rebound slightly from today’s quarterly low of 20.78. GBP/ZAR trended in the region of 20.93 at the time of writing.
This was despite lingering market concerns about returning no-deal Brexit fears. These continue to weigh heavily on the Pound (GBP) outlook.
(Published 11:17 BST 22/07/2020)
Pound to South African Rand Exchange Rate Trending Near Quarterly Worst
Brief weakness in the South African Rand (ZAR) this week has not been enough to prevent what could be another week of losses for the Pound Sterling to South African Rand (GBP/ZAR) exchange rate. Investors are selling the Pound (GBP) en masse today on fresh Brexit fears.
Last week saw the Pound tumble. GBP/ZAR fell from the interbank level of 21.17 to 20.97 throughout the week.
At the beginning of this week, GBP/ZAR attempted a rebound recovery. However while it was able to climb above the level of 21.00, the pair quickly tumbled lower again.
At the time of writing on Wednesday, GBP/ZAR trends near the interbank level of 20.84. This was the lowest level for GBP/ZAR in over a quarter, since March.
Investors have once again become anxious that Britain could be headed for a no-deal Brexit outcome.
Pound (GBP) Exchange Rates Slump on Fears UK Government Could Give Up Brexit Talks
At the beginning of the week, investors bought the Pound (GBP) back from its lowest levels. The Pound benefitted from reports that UK companies were making progress on a coronavirus vaccine.
Hopes for Brexit progress had also been boosting the Pound. However, no-deal Brexit fears are surging once again today.
Today’s headlines claim that the UK government is close to giving up on UK-EU trade negotiations amid lasting disagreements.
While events like this have become unsurprising through the course of the Brexit process, fears of a no-deal Brexit still continue to weigh heavily on the Pound outlook.
According to a source from the UK negotiation team:
‘No trade deal has to be the working assumption, because that’s what we have to prepare for. But it doesn’t mean it’s what we want or are working to make happen.’
South African Rand (ZAR) Exchange Rates Climbing Ahead of Key Data
The South African Rand (ZAR) is benefitting from the Pound’s (GBP) weakness today. Investors are buying the relatively risky emerging market correlated South African Rand due to market sentiment.
Amid broad market optimism over this week’s EU Recovery Fund agreement, as well as hopes for a coronavirus vaccine, investors have remained willing to take risks.
The South African Rand remains sturdy today even amid a brief dip in risk-sentiment though. A fresh rise in US-China trade tensions was not enough to knock ZAR.
Investors remain steady on the South African Rand amid anticipation for upcoming South African data. Markets also await tomorrow’s South African Reserve Bank (SARB) policy decision.
Pound to South African Rand (GBP/ZAR) Exchange Rate Awaits Brexit and SARB News
Investors may have little reason to buy the Pound to South African Rand (GBP/ZAR) exchange rate again in the coming sessions.
The Pound (GBP) may remain weak amid revived no-deal Brexit fears. However, if developments indicate that a UK-EU deal is still highly possible, the Pound could recover some of its weakness.
Without Brexit optimism though, the Pound could remain jittery and weak. In this situation, GBP/ZAR may only advance if the Rand (ZAR) falls.
The South African Rand could react to any surprising factors in this afternoon’s South African retail sales results.
However, tomorrow’s South African Reserve Bank (SARB) policy decision could be even more influential for the Pound to South African Rand (GBP/ZAR) exchange rate outlook.