Pound to South African Rand (GBP/ZAR) Exchange Rate Gains as South African Covid Crisis Worsens

The Pound Sterling to South African Rand (GBP/ZAR) exchange rate continues to advance today as the rand continues to struggle against the coronavirus pandemic.

The pair is currently trading around 21.07.

Pound Gains as Third Time’s a Charm with UK back in Lockdown

The Pound (GBP) wobbled last week, as the UK was plunged into another national lockdown to combat rising coronavirus infections.

Whilst the third national lockdown has proven GBP-negative, the anticipation and implementation of a successful vaccine rollout would start a gradual unlocking of the economy and its recovery.

Furthermore, Sterling has been able to remain on the offensive despite lacklustre UK PMI data.

As 2.4 million people have now received their first vaccination in the UK, the rollout will remain in focus and hopes that an economic recovery is on the horizon could push Sterling higher.

Influencing the Pound (GBP) exchange rates may be the range of data due to be released on Friday, industrial production figures and GDP data could prove GBP-negative.

South African Rand (GBP/ZAR) Struggles on back of Coronavirus Pandemic

The South African Rand (ZAR) struggled as the country continues to be hit by the more infectious strain of the coronavirus.

Furthermore, the US Dollar strengthened after political tensions swamped the country, dampening risk-appetite for the rand.

However, markets seem optimistic over the introduction of vaccinations and the expectation that the Democrat control of the Senate makes it more likely increased fiscal stimulus will be passed under Biden, as the inauguration is little over a week away.

ZAR investors will continue to keep an eye on any South African coronavirus developments as a worsening situation could weigh on the exchange rate. Furthermore, Wednesday sees retail sales data for November forecasted at -2.3% which could also prove ZAR-negative.

GBP/ZAR Outlook: Pound to Edge Higher?

Looking ahead, the GBP/ZAR exchange rate is likely to trade widely this week, as coronavirus headlines paired with data releases continue to cause the pairing to fluctuate.

Georgina Clissold

Contact Georgina Clissold