The Pound South African Rand (GBP/ZAR) exchange rate has been fluctuating through much of this morning’s session after UK GDP returned to growth in the three months leading to February.
At the time of writing the GBP/ZAR exchange rate is trading at around 20.0465.
Pound (GBP) Supported by UK GDP Growth Data
The Pound has found supported this morning following the release of the most recent GDP data from the UK for the three months leading to February.
Though UK GDP remained in contraction, a growth of 0.4% was recorded led by growth in the construction sector.
Emma-Lou Montgomery, associate director for Personal Investing at Fidelity International commented on the growth in GDP saying:
‘After a sobering start to the year, February’s GDP figures show a rosier picture. GDP returned to growth in the second month of the year, up 0.4%, adding to expectations that the Q1 downturn won’t be as sharp as initially feared.’
‘Consumers have enthusiastically returned to the high street, glasses have been raised to the opening of outdoor dining and drinking as restrictions ease and the vaccination programme continues at pace.’
The Pound has found further support this morning following England’s second stage of lockdown easing which allowed non-essential retail to reopen, investors remain optimistic surrounding the UK’s economic recovery following the reopening of some sectors.
South African Rand (ZAR) Mixed as US Dollar Rebounds
The South African Rand has been mixed against the Pound during the first half of today’s session as a rebound in the US Dollar dragged down ZAR by souring global sentiment towards emerging markets.
Investors have been holding back from taking any risks as they await the latest inflation data from the US due to be released later this afternoon.
ETM Analytics economists commented on the wait for US inflation, and hinted that it could cause problems:
‘Any suggestions of rising inflationary pressures in today’s U.S. CPI print for March could potentially reignite the rise in UST yields that caused havoc in global markets through Q1.’
The South African Rand has managed to limit any losses following a positive mining production data release from South Africa for February.
As reported by Statistics South Africa:
‘Mining production in South Africa increased 0.8 percent from a year earlier in February of 2021, following an upwardly revised 8.4 percent slump in the previous month. It was the first month of growth in mining activity since February of last year.’
Pound South African Rand Exchange Rate Outlook: South African Retail Sales in Focus
For South African Rand investors, tomorrow will see the release of the latest retail sales figures from South Africa for February which are forecast to have risen almost 2%, however the figures are expected to remain in contraction.
For Pound traders, a speech from the Bank of England’s Jonathan Haskel could shed some light on the UK’s economic reopening and recovery in the coming months.
The GBP/ZAR exchange rate will continue to be driven by any further coronavirus developments during the week, as the UK now offers those over 45 to book a vaccine appointment investors will remain optimistic surrounding the UK’s economic recovery as the vaccine rollout remains on course.