The Pound South African Rand (GBP/ZAR) exchange rate traded in a wide range last week amidst highly volatile market conditions.
What’s Been Happening: Pound South African Rand Fluctuates in Skittish Trade
The Pound got off to a poor start last week. Underwhelming UK GDP and unemployment figures taking their toll on Sterling sentiment.
At the same time, the Rand faced pressure as global recession fears rippled through markets.
The GBP/ZAR exchange rate then slumped through the middle of the week. While the Rand benefited from a post-Fed slump in the US Dollar (USD), the Pound was undermined by renewed Brexit jitters.
The Pound then reversed this downtrend in the wake of the Bank of England’s (BoE) latest interest rate decision.
The BoE only raised rates by a modest 25bps, but hints that future hikes could be more aggressive helped to turbocharge Sterling.
However, the Pound was unable to consolidate at its best levels. GBP exchange rates retreated on Friday in the wake of comments from the BoE’s Huw Pill. Pill warned that hiking rates too quickly would trigger a recession.
The Rand also faltered at the end of the week. ZAR demand being suppressed by a souring market mood.
Three Things to Watch Out for This Week
- UK Inflation
The publication of the UK’s consumer price index will be the primary focus for GBP investors this week. Will another acceleration of inflation reignite concerns over the UK’s cost of living crisis?
- UK Retail Sales
Also influencing the Pound this week will be the UK’s latest retail sales figures. A forecast slump in sales growth could push Sterling sharply lower.
- South African Inflation
For ZAR investors the focus will be on the release of South Africa’s own CPI figures. If inflation climbs above the South Africa Reserve Bank’s (SARB) 6% target the Rand may strengthen.
Pound South African Rand Forecast
The Pound South African Rand exchange rate may face an uphill battle this week, with UK data releases potentially highlighting the impact of the country’s cost of living crisis.