The Pound South African Rand (GBP/ZAR) exchange rate traded in a wide range last week, as concerns over the UK’s vaccine rollout offset optimism regarding the reopening of UK economy.
What’s Been Happening: Pound South African Rand Rocked by Vaccine Concerns
The Pound initially held its ground against the Rand last week as investors welcomed the reopening of a large part of the UK economy.
However, these gains quickly began to fade after it was announced that the Bank of England’s (BoE) Andy Haldane would be stepping down from the bank in June.
These losses were then compounded by concerns over the AstraZeneca vaccine and the UK’s reliance upon for its vaccination programme, which drove GBP/ZAR to a new three-month low.
Meanwhile, the Rand received support through most of last week’s session as a result of broad weakness in the US Dollar (USD), and some stronger-than-expected domestic retail sales figures.
But the Rand relinquished a large portion of these gains at the very end of the week, amidst a slight souring of market sentiment, which allowed the Pound to rebound from its lows.
Three Things to Watch Out for This Week
- UK Inflation
The Pound South African Rand exchange rate may look to extend its recovery this week with the publication of the UK’s consumer price index, which is expected to report that inflation began to accelerate again in March.
- UK PMIs
Also influencing Sterling will be the publication of the UK’s latest PMI figures at the end of the week. These could be very supportive of the Pound if activity in the manufacturing and service sectors are shown to have risen again this month as the UK eased coronavirus restrictions.
- South African Inflation
For ZAR investors the main focus this week will be on South Africa’s own CPI figures. Will a bump in inflation last month help to bolster the appeal of the Rand?
Pound South African Rand Forecast
Looking ahead, a slew of UK data releases could help the Pound South African Rand exchange rate mount a recovery this week