GBP/ZAR Exchange Rate Edges Higher Despite Improving South African PPI Figures
The Pound South African Rand (GBP/ZAR) exchange rate is up by 0.4% today and is trading around R18.7416 on the inter-bank market.
The South African Rand (ZAR) fell against the Pound (GBP) despite South Africa’s Producer Price Index figures for March exceeding expectations at 1.3%.
These were also followed by an improvement in the yearly PPI figures for March, which rose above the expected 5.4% increase to 6.2%.
ZAR, however, has failed to recover from yesterday’s South African consumer confidence figures which dipped further in the first quarter, from 7 to 2.
Mamello Matikinca-Ngwenya, a Chief Economist at FNB, commented:
‘The shock implementation of stage 4 load-shedding by Eskom during February and March no doubt had a very detrimental impact on the South African economy and it is therefore not surprising that consumers are becoming especially concerned about our economic prospects.’
The Pound, meanwhile, has stabilised after the 1922 Committee ruled out another leadership challenge against Prime Minister Theresa May.
GBP/ZAR Exchange Rate Rises as No-Confidence Vote on May’s Leadership Ruled Out
Sterling rose against the South African Rand on the relief that Theresa May would at least remain leader for the duration of the Brexit process, with no further threat of a no-confidence vote possible until December from Parliament.
However, as cross-party talks between the Conservatives and Labour falter, this is beginning to weigh on confidence in Sterling.
The opposition leader, Jeremy Corbyn, said yesterday:
‘There’s got to be some changes by the government. We cannot go on hearing this tired old mantra that the Brexit agreement has to be adhered to.’
There have been no notable UK economic data releases today, with many Pound traders focusing on political developments instead.
Meanwhile, the general lack of any definitive statements on the UK’s progress with the withdrawal agreement following the Easter break – and the EU’s ‘flextension’ – has left many traders feeling jittery.
GBP/ZAR Outlook: Brexit Developments to Remain in Focus
Pound traders will be looking ahead to tomorrow’s publication of the BBA mortgage approvals figures for March, and with any signs of improvement this could see Sterling rise further.
South African Rand traders, however, will most likely be focusing on geopolitical developments, and with China being one of its major trading partners, any news ahead of next week’s US-China trade talks of a possible deal could benefit ZAR.
The Pound South African Rand (GBP/ZAR) exchange rate will most likely be dictated by Brexit developments over the coming days, and with any signs of improving relations between the Conservatives and Labour in cross-party talks, this could improve market sentiment in Sterling.