The Pound South African Rand (GBP/ZAR) exchange rate has been trending higher today as optimism continues to grow over the next stage of lockdown easing in England.
At the time of writing the GBP/ZAR exchange rate is trading around the 19.8038 level as the South African Rand limits losses on the back of the US Dollar’s weakness.
Pound (GBP) Supported by UK Economic Optimism
The Pound is being supported against many of its major rivals today as the next stage of lockdown easing in England creeps up.
Prime Minister Boris Johnson is expected to lead a press conference this evening to confirm that the next stage of the roadmap out of lockdown will be implemented on the 17th May.
The further relaxation of rules will see indoor hospitality reopen and groups of up to 30 people allowed to meet outdoors.
Professor Sir John Bell of Oxford University spoke to UK television this morning saying that the UK was in a ‘very strong position’ moving forward:
‘I think we’ll still probably go steady but perhaps a bit faster, I’ll be interested to see what the government announces. I’m feeling pretty comfortable with where we are at the moment.’
Sterling had found further support following the recent council elections across the UK where the SNP narrowly missed out on a majority in Scotland which appears to have eased concerns about a breakup of the UK in a second referendum.
South African Rand (ZAR) Limits Losses on US Dollar Weakness
Though the South African Rand had been trending lower against the Pound for much of the day, the currency has been able to limit losses following a pullback in the US Dollar.
A worse than expected US jobs report for April and a rise in unemployment released at the end of last week saw the US Dollar plummet heading into the weekend.
The rise in unemployment looks to confirm that the Federal Reserve will not raise interest rates anytime soon, limiting the US Dollar and allowing ZAR to strengthen.
More so, the South African Rand is also being supported by to higher yields on South African government bonds.
Pound South African Rand Exchange Rate Outlook: UK GDP Data in Focus
Wednesday will see the release of preliminary GDP data from the UK for Q1 which is forecast to show that GDP contracted 1.4% as the UK battled through a third national lockdown.
Any indication that the UK economy shrank less-than-expected would see the Pound find further support and head higher.
For South African Rand traders, tomorrow will see the release of manufacturing production data from South Africa which are forecast to have risen 2% during March as the country slowly bounces back from the worst of the coronavirus pandemic.