GBP/ZAR Exchange Rate Edges Higher as UK Mortgage Approvals Hit Highest in Almost 13-Years
The Pound to South African Rand (GBP/ZAR) exchange rate rose by 0.4% today. The pairing is currently trading around R22.003.
The Pound (GBP) rose this morning following the release of August’s UK Mortgage Approvals figure, which jumped from 66.3 thousand to 84.7 thousand. Consequently, British markets have celebrated the return to form in the housing sector.
Analysts at Reuters commented:
‘British mortgage approvals increased sharply in August to hit their highest in almost 13 years, a latest sign of a post-lockdown bounce-back in the housing market.’
Nevertheless, many British firms have warned that Covid-19 could derail many businesses throughout the autumn and winter months.
The retail outlet Card Factory warned:
‘Recovery in the retail sector remains sensitive to spikes in Covid-19 cases and potential local or national restrictions, creating uncertainty about customer footfall and shopping habits.’
South African Rand (ZAR) Sinks as US Political Uncertainty Weighs on Risky Assets
The South African Rand (ZAR) struggled today despite South Africa’s Unemployment Rate figure for the second quarter falling from 30.1% to 23.3%.
However, this was not enough to inspire confidence in South Africa’s struggling economy.
According to several sources, the nation’s strict lockdown distorted labour force data because of fewer people looking for employment.
StatsSA commented:
‘The South African economy shed 2.2 million jobs in the second quarter of 2020. The expanded definition of unemployment, which includes those discouraged and those having other reasons for not searching (e.g. lockdown), increased by 2.3 percentage points to 42.0%.’
However, the risk-averse South African Rand has suffered ahead of today’s US presidential debate between Donald Trump and Joe Biden.
Any political uncertainties would dampen risk sentiment and weigh on risky assets like ZAR.
Jasper Lawler of London Capital Group said:
‘A big upset by Trump could unearth some market volatility as investors re-price a possible Trump second term – or maybe worse – a contested election result and even bigger delays until the next stimulus package gets passed.’
GBP/ZAR Outlook: Could Brexit Trade Deal Hopes Boost Sterling?
South African Rand (ZAR) investors will be eyeing global risk sentiment over the next few days. As a result, the risk-averse ZAR could continue to sink if markets react negatively to rising political uncertainties in the United States.
In South African economic news, tomorrow will see the publication of the latest trade figures for August. If this paints a bleak outlook for South Africa’s already struggling economy, then the ZAR/GBP exchange rate could sink.
Pound (GBP) investors will be paying attention to tomorrow’s release of the UK GDP figure for the second quarter. However, if this confirms forecasts and falls by -20.4%, then Sterling would shed some of its gains.
The GBP/ZAR exchange rate will remain sensitive to Brexit developments this week. As a result, the Pound could edge higher if UK-EU talks show signs of progress towards a post-Brexit trade deal.
Comments are closed.