Pound to South African Rand (GBP/ZAR) movement has been limited today with the pairing unable to recover from a recent slump.
At the time of writing on Thursday afternoon, GBP/ZAR is currently trading near the level of 20.68.
Pound (GBP) Subdued as Stark Coronavirus Figures Upset GBP Exchange Rates
The Pound (GBP) has struggled towards the end of this week, as GBP investors are jittery over daily coronavirus figures.
Since a third national lockdown was announced for Britain almost two weeks ago, daily infections are at the same level seen before the restrictions were implemented.
Furthermore, the UK hit 100,000 deaths since the pandemic began yesterday, with 1,564 deaths recorded in just one day.
However, the Pound has found support from the so far successful vaccine rollout, with 4.5% of the population now vaccinated against the virus.
Although tougher restrictions could be rolled out next week to help combat the virus.
Speaking to ITV news Home Secretary Priti Patel fuelled speculation that restrictions would be announced over the weekend, or into next week:
‘We are not thinking about bringing in new measures today or tomorrow.’
‘This isn’t about new rules coming in – we’re going to stick with enforcing the current measures.’
South African Rand (ZAR) Exchange Rate Finds Limited Gains
The South African Rand (ZAR) exchange rate was able to recover from large losses and begin a smooth rallying this week.
The recovery comes as optimism surrounds South Africa’s vaccine rollout. The country has secured more vaccines for its population soothing markets and cooling market sentiment, for the time being.
Pound to South African Rand Outlook: GDP Data could push down Pound Further
If the UK’s coronavirus situation worsens the Pound could be subdued as tougher restrictions are brought in to help tackle the virus, spelling trouble that the UK’s economy will not be able to reopen as soon as expected.
Tougher restrictions could limit the Pound and allow the South African Rand to advance easily.
Furthermore, the UK’s GDP data released tomorrow which is forecast to have fallen to -12% could cause concern for GBP investors. The British economy shrank 8.2 percent year-on-year in October of 2020.
For the Rand, as there are no data releases, investors will be keeping an eye on the UK’s pandemic situation but also US politics to see if there is a drawback on the US Dollar (USD) risk-off trade could cause the Dollar to gain if there is further uncertainty in US politics. Though risk-on trade would weaken Dollar and boost Rand, proving ZAR-positive.