Pound South African Rand Weekly Forecast: GBP/ZAR Exchange Rate Makes Only Modest Gains in Spite of Impressive UK Data

The Pound South African Rand (GBP/ZAR) exchange rate ticked slightly higher last week, as some upbeat UK data releases were unable to offset fresh coronavirus jitters. 

What’s Been Happening: Pound South African Rand Finds Limited Gains on Upbeat Data 

The Pound got off to a strong start against the Rand last week, with an initial jump in Sterling being sustained after the UK’s latest jobs figures reported a surprise drop in unemployment. 

However, GBP/ZAR then began to falter in the wake of a weaker-than-expected inflation reading, as well as a warning from health experts that the UK could face a ‘summer surge’ of coronavirus cases as more restrictions are lifted in the coming months.

While GBP investors welcomed some stronger-than-expected retail sales and PMI figures at the end of the week, the Pound remained unable to claw back its losses. 

Meanwhile, the Rand was met by volatility last week amidst fluctuating market sentiment. 

A pullback in the US Dollar initially lent some support to the emerging market currency, before concerns over an alarming rise of coronavirus cases in India started to sour the mood and weaken the appeal of the Rand.

Three Things to Watch Out for This Week 

  1. Coronavirus Headlines 

The GBP/ZAR exchange rate may face additional volatility this week as global coronavirus developments, particularly those coming from India, are likely to remain a key consideration for investors.

  1. UK Politics 

Also influencing Sterling will be domestic political developments as GBP investors brace for next week’s Scottish Parliamentary elections, amidst concerns a landslide victory for the SNP could energise the party’s call for another independence referendum.  

  1. South African Trade Figures 

For ZAR investors the main focus this week will be on South Africa’s last trade figures, with a narrowing of the country’s trade surplus last month potentially weakening the Rand. 

Pound South African Rand Forecast 

Looking ahead, Pound South African Rand exchange rate may continue to trade in a wide range this week as investors eye coronavirus and political developments for fresh impetus.