Pound South African Rand Exchange Rate Subdued amid SA Loadshedding
The Pound South African Rand (GBP/ZAR) exchange rate is trapped in a narrow range this morning. An escalation of SA’s rolling blackouts limiting the Rand’s gains, despite souring Sterling sentiment.
At the time of writing the GBP/ZAR exchange rate is trading at around ZAR20.9245. Virtually unchanged from this morning’s opening rate.
South African Rand (ZAR) Muted as Eskom Woes Offset Upbeat Mood
The South African Rand (ZAR) is rangebound so far today, amid ongoing concerns over domestic power cuts.
State utility Eskom escalated its loadshedding to stage 6 on Wednesday for the fourth time in 2022 as 47% of the nation’s grid went down.
South Africa has found itself in the dark for a record number of days this year. Costing the economy billions in lost production.
Analysts also warn these rolling blackouts could persist for another 12 months. As Eskom struggles to add more power generation capacity to the grid.
Domestic power concerns have largely overshadowed South Africa’s latest consumer confidence index, despite it printing above forecast in the fourth quarter.
Pound (GBP) Flat as Industrial Action Increases Pressure on UK Economy
The Pound (GBP) is struggling to attract support this morning as GBP investors grow increasingly unnerved by the industrial action sweeping across the UK.
The UK’s ‘winter of discontent’ is now in full swing, with strikes by rail, postal and NHS workers set to strike this month. Economists suggest more than 1m working days could be lost due to the disputes.
These strikes also threaten to severely disrupt economic activity in the UK during one of the busiest times of the year for many businesses.
The UK’s vital services sector will no doubt bare the brunt of this, with analysts warning that some hospitality firms could go under due to cancellations.
Kate Nicholls, chief executive officer of the trade body UKHospitality, told Bloomberg:
‘We’re getting into Omicron territory. A lot of people are saying it’s too difficult to come in, and if you’re writing off next week, you might as well write off the week after. So it’s going to be an early Christmas shutdown.’
Pound South African Rand Exchange Rate Forecast: Cautious Mood to Dent ZAR?
In the absence of any notable data, movement in the Pound South African Rand (GBP/ZAR) exchange rate is likely to be tied to market risk appetite through the remainder of the week.
Rising geopolitical tensions could see a more cautious mood prevail and prompt investors to shun the emerging market Rand.
The increasingly risk sensitive Pound could also be negatively impacted by a souring mood, although not as acutely as the Rand.