The Pound South African Rand (GBP/ZAR) exchange rate nosedived to its lowest levels since February 2020 last week, as the emerging market Rand was turbocharged by a prevailing risk-on mood.
What’s Been Happening: Pound South African Rand Plummets in Bullish Trade
The South African Rand rocketed higher against the Pound and the majority of its other peers last week as the increasingly optimistic global outlook, as well as the ongoing rise in commodity prices, bolstered the appeal of the emerging market currency.
The Rand did face a small setback in the first half of the week however, after data revealed that domestic unemployment rose to a new record high in the first quarter of 2021.
Meanwhile, the Pound struggled to hold its ground against the Rand, as it was left vulnerable by concerns that rising cases of the Delta variant of the coronavirus in the UK could disrupt the government’s plan to open up the final parts of the UK economy later this month.
Three Things to Watch Out for This Week
- UK Coronavirus Developments
GBP investors will continue to key a close eye on UK coronavirus developments this week, with the Pound vulnerable to any headlines which indicate the government may be considering delaying the next stage of lockdown easing.
- UK GDP
Also influencing Sterling this week will be the UK’s latest monthly GDP release, with a strong start to the second quarter likely to lift the Pound.
- South African GDP
For ZAR investors the primary focus this week will be South Africa’s own GDP figures. Will another expansion of growth in the first quarter of 2021 help to boost the Rand?
Pound South African Rand Forecast
Looking ahead, the GBP/ZAR exchange rate could be met by further losses this week as UK coronavirus developments continue to pose a major risk to Sterling.