The Pound may well be shifted dramatically over the coming week, given the high-impact nature of impending UK ecostats.
The Rand is less likely to make dramatic movements given the limited amount of data on offer, though a pair of PMI results still have the potential to generate some notable movement.
Recent GBP ZAR Movement: Sterling Weakened by ‘Brexit’ Fears, Rand Aided by ANC Divisions
GBP/ZAR fell considerably toward the close of trading on Friday, mainly due to an upsurge in demand for the South African Rand.
Losses for the Pound were initiated by a near-continuous stream of ‘Brexit’-based concerns being voiced, with most focusing on whether a ‘Hard Brexit’, meaning a quick exit from the EU, would be good or bad news for the UK economy.
The Rand ended at the opposite end of the currency exchange spectrum, rising against most of its regular peers due to high demand coming from political news.
Amid continuing unrest about the supposedly corrupt South African President Jacob Zuma, signs began to show that Zuma’s party, the African National Congress (ANC), were fracturing, which raised hopes of a regime change, or at least a new national leader.
Pound Sterling Outlook: Major Movement Expected on PMI Stats Next Week
The near-term for the UK is set to be action-packed, as Monday to Wednesday will bring key September manufacturing, construction and services PMI results.
The PMIs have largely been considered solid indicators of how the UK economy has fared after the EU Referendum, so the fact that losses are forecasts for both manufacturing and services bodes particularity ill.
On the plus side, however, the construction printing is expected to rise into the plus-50 growth range, which could go a long way to restoring the confidence of investors.
Rand Rate Predictions: Positive PMI Forecasts could Trigger ZAR Rally Next Week
The coming Monday and Wednesday are expected to bring the announcement of South Africa’s Barclay’s manufacturing PMI and Standard Bank PMI respectively and, in a positive development, both results are expected to rise.
Given the lack of other major data due out next week, the Rand could be bolstered by positive movements in these areas, especially if the costs of precious metal rises at the same time.
Recent GBP ZAR Exchange Rates
At the time of writing, the Pound Rand (GBP ZAR) exchange rate was trending in the region of 17.9030.
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