UK Q2 GDP Upgrade could Boost Future GBP/ZAR Exchange Rate
The Pound (GBP) has fallen by -0.7% against the South African Rand (ZAR) today, causing the GBP/ZAR exchange rate to drop to a level of ZAR19.1197.
This deterioration puts the GBP/ZAR exchange rate near the lowest level since early September and comes mainly because of high demand for the Rand.
Despite this recent drop in pairing performance and the risk of greater losses this afternoon, the Pound could still appreciate over the week ahead.
28th September will bring finalised Q2 UK GDP growth rate figures, which are predicted to show higher activity for the quarterly and annual readings.
Forecast-matching or forecast-beating GDP results could be enough to push the Pound up against the Rand, leading to a potential GBP/ZAR exchange rate rally.
Surprise Brexit Breakthrough could Push GBP/ZAR Exchange Rate Higher
Outside of next Friday’s UK GDP data, the Pound (GBP) could receive a more immediate boost against the South African Rand (ZAR) on any Brexit news.
Specifically, the announcement that talks are moving ahead could be enough to boost demand for the Pound.
UK and EU negotiators are still trying to reach an agreement on issues like the Irish border and if a breakthrough is declared then GBP trader confidence could soar.
This comes in the context of the November negotiation deadline, which is fast approaching and will reportedly not be extended for a second time.
South African Rand to Pound Forecast: Will ZAR/GBP Exchange Rate Rise Further on SARB Interest Rate Freeze?
The South African Rand (ZAR) has surged today, rising sharply against the Pound (GBP), Euro and US Dollar thanks to high levels of domestic support.
This appreciation for the South African currency has been caused by a surprise inflation rate slowdown on Wednesday.
Lower inflation reduces the odds of a South African Reserve Bank (SARB) interest rate hike this afternoon, which is a desirable outcome for Rand traders.
While most global currency traders are looking for higher interest rates, the current desire among ZAR traders is for a reduction of the SARB’s current 6.5% interest rate.
Although some economists are still predicting a SARB interest rate hike later in the year, this afternoon’s meeting isn’t expected to bring any change to rates.
If this expectation proves accurate, the Rand could extend its lead against the Pound and rise further in the ZAR/GBP exchange rate.
Future ZAR/GBP Forecast: Falling Consumer Confidence could Reduce Rand Demand
Beyond this week’s South African news, the Rand (ZAR) could decline against the Pound (GBP) on Tuesday when consumer confidence data comes out.
Covering reported sentiment levels in Q3 2018, this reading is expected to show a drop from 22 points to 17.
Such a shift would still show more positive respondents than negative ones, but could nonetheless lower demand for the South African currency.
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