Pound South African Rand Weekly Forecast: GBP/ZAR Exchange Rate Fluctuates on Cost of Living Concerns 

The Pound South African Rand (GBP/ZAR) exchange rate traded in a wide range last week, with the pairing striking both a two-week high and a two-year low. 

What’s Been Happening: GBP/ZAR Rocked by Cost of Living Fears 

The Pound initially firmed last week, rising on the back of a stronger-than-expected services PMI print. 

However, it didn’t take long for Sterling to relinquish these gains as the UK’s National Insurance rise thrust the UK’s cost-of-living crisis back into the spotlight. 

These losses were extended by a warning from Deutsche bank that the squeeze on consumers puts the UK at risk of a recession this year. 

Meanwhile, the South African Rand opened last week’s session on the back foot, being pressured by doubts over Ukraine-Russia peace talks following reports of alleged atrocities committed by Russian troops in towns like Bucha as they withdrew from the north of the country. 

Demand for the Rand was further weakened by a rise in the US dollar as well as expectations the US Federal Reserve is gearing up to deliver a series of aggressive interest rate hikes. 

An uptick in commodity prices then allowed the Rand to rally in the latter half of the week, although these gains were tempered by the news that state utility Eskom would need to reimplement scheduled power cuts on Friday. 

Three Things to Watch Out for This Week 

  1. UK Inflation 

The UK’s consumer price index is expected to report another acceleration of domestic inflation. Will another hotter-than-expected print give rise to fresh cost of living concerns and weigh on the Pound? 

  1. South African Retail Sales 

South Africa’s latest retail sales figures could exert some pressure on the Rand this week, amidst forecasts sales growth will have contracted in February.  

  1. Ukraine Headlines 

Elsewhere we will likely see events in Ukraine continue to influence the GBP/ZAR exchange rate, with a new large-scale Russian offensive in the east potentially stoking volatility in the pairing. 

GBP/ZAR Forecast 

The GBP/ZAR exchange rate may continue to trade erratically this week, amidst a mix of high-impact data and ongoing concerns over the situation in Ukraine. 

Matthew Andrews

Contact Matthew Andrews


Related
Do Not Sell My Personal Information