Pound South African Rand (GBP/ZAR) Exchange Rate Flat Ahead of South Africa Economic Growth Figures
The Pound Sterling South African Rand (GBP/ZAR) exchange rate remained flat, and the pairing is currently trading at an inter-bank rate of R18.6114.
On Friday, the South African Rand weakened as political drivers faded after President Cyril Ramaphosa selected his Cabinet.
On Wednesday the South African President announced his smaller Cabinet which was well received by markets, helping ZAR recover from its five-month lows.
This announcement came after Ramaphosa’s pre-election pledge to revive and reform the ailing economy and attract foreign investors.
The Rand likely remained muted as investors looked ahead to next week’s first quarter GDP data as the chance of mining and manufacturing slumping have increased.
Sterling (GBP) Muted as UK Consumer Confidence Hits Eight-Month High
GfK reported that UK consumer confidence jumped to an eight-month high in May.
British consumers were the most confident since September 2018, as the GfK consumer sentiment index rose to a higher-than-forecast -10 from -13.
Despite many businesses calling a halt to major investment until the Brexit fog clears, demand from British consumers has kept the economy ticking over.
However, GfK said it expects further gains to be limited while Britain’s 31 October departure from the EU remained clouded in uncertainty.
Commenting on this, GfK Executive, Joe Staton said:
‘Consumers will need to be convinced in heart, head and wallet that Brexit’s murkiness has finally come to an end.’
CBI: No-Deal Brexit to Cause ‘Severe’ Damage
On Friday, the Confederation of British Industry (CBI) warned Tory leadership candidates that a no-deal Brexit would do ‘severe’ damage to businesses.
This comes after many leadership candidates expressed the UK would be coming out of the European Union with or without a deal on 31 October.
Speaking to BBC Radio 4, CBI Director General, Carolyn Fairbairn said a no-deal Brexit should be an option ‘that is not even considered.’
In addition she noted that businesses were not ready to crash out of the EU, and stated:
‘This idea that we are ready is just not true.
‘How can you be prepared for £20 billion of increased customs costs? How can you be prepared for tariffs raising overnight? 150,000 businesses with no systems in place to deal with this.
‘This is not a responsible strategy for a government to have.’
Pound South African Rand Outlook: Will Increased UK manufacturing Activity Buoy GBP?
Looking towards the start of next week, the Pound (GBP) could rise against the South African Rand (ZAR) following the release of the UK manufacturing PMI.
If growth in the UK manufacturing sector increases by more than forecast, Sterling could receive an upswing in support.
Meanwhile, the South African total new vehicles sales are due for release on Monday.
If vehicle sales increase higher than expected, it could buoy the Rand, and the Pound South African Rand (GBP/ZAR) exchange rate could fall.