The Pound South African Rand (GBP/ZAR) exchange rate has dipped today following a global risk-on mood.
At the time of writing the GBP/ZAR exchange rate is currently trading at around 19.8754 as the Pound struggles against fresh coronavirus concerns.
Pound (GBP) Weakens over Coronavirus Variant Concerns
The Pound has weakened today following the unexpected announcement that the Bank of England’s (BoE) Chief Economist Andy Haldane is set to step down from the bank in June.
The move comes as a surprise following the fact that he had been reappointed for a new three-year term as a member of the Monetary Policy Committee last year.
More so, concerns have crept back in for Pound investors over the discovery of a cluster of 44 cases of the South African variant of the coronavirus in the UK.
Speaking yesterday evening Professor Peter Openshaw commented on the discovery of more cases of the variant:
‘A lot of we scientists are very concerned about what’s happening at the moment. I think we’re all just hoping that the staged reduction in lockdown is going to be ok. It is being done reasonably cautiously but I think this is not good news.’
South African Rand (ZAR) Supported by Positive Retail Sales Data
The South African Rand is being supported today following a general risk-on mood and positive retail sales figures from South Africa.
As reported by Statistics South Africa, retail sales in South Africa increased 6.9% percent in February of 2021. Year-on-year data showed that Retail sales rose 2.3% in February following a 3.7% contraction in January.
The increase in retail sales has provided support for South Africa the coronavirus pandemic, as investors hope recovery is well on its way.
The South African Rand has also been supported by the US Dollar’s weakness today, a pullback in US Treasury yields further weighed on the ‘Greenback’ and allowed emerging economy currencies like ZAR to capitalise and head higher.
Pound South African Rand Exchange Rate Outlook: Coronavirus Developments in Focus
In absence of any notable data, Pound investors will be focusing on any coronavirus developments in the coming days.
Investors will continue to keep a close eye on the cluster of South African variant cases to see if they can be contained, any indication that different variants of the virus could cause the UK’s lockdown easing to be delayed would cause the Pound to suffer.
For South African Rand traders, the global market mood will continue to drive ZAR exchange rates in the coming days, any dovish commentary from the Federal Reserve regarding the US’s economic recovery could push ZAR higher.