Pound South African Rand (GBP/ZAR) Exchange Rate Falls despite Ramaphosa Bribe Scandal
The Pound Sterling South African Rand (GBP/ZAR) exchange rate slipped and the pairing is currently trading at an inter-bank rate of R18.7976.
The South African Rand slipped on Thursday as investors were cautious following reports of an investigation into President Cyril Ramaphosa.
The investigation is into a donation for Ramaphosa’s 2017 campaign for leader of the governing African National Congress (ANC) party.
The ANC leader is said to have misled parliament over the donation made by the head of services company Bosasa.
However, while analysts suggest there is no immediate risk that he could be removed, the anti-corruption watchdog’s investigation increases political uncertainty.
This comes at a time when the economy is performing poorly, and Analyst at ETM Analytics, Lloyd Miller said:
‘The Bosasa scandal is the main factor driving a deterioration in risk sentiment.’
Sterling (GBP) Slips as Brexit Continues to Loom Over UK Housing Market
Meanwhile, data released early on Thursday suggests that the Brexit gloom is appearing to clear.
A survey from the Royal Institute of Chartered Surveyors (RICS) showed that its house price measure beat market expectations.
The RICS Housing Price Balance rose from -22 in April to -10 in May, the highest reading since October 2018.
However, while this suggests the housing market is recovering, Brexit remains a concern.
Commenting on this, Simon Rubinsohn, RICS Chief Economist said:
‘Some comfort can be drawn from the results of the latest RICS survey as it suggests that the housing market in aggregate may be steading. However, much of the anecdotal insight provided by respondents is still quite cautious, reflecting concerns about both the underlying political and economic climate.’
South African Rand (ZAR) Rises on Higher than Forecast Retail Sales
On Wednesday, data revealed that South African retail sales jumped to a higher-than-forecast 2.4% in April.
This was the highest annual rise since November 2018 which likely provided the Rand with an upswing of support.
However, data also revealed that retail inflation fell below its March level suggesting a constrained spending environment.
Pound South African Rand Outlook: Will a Dovish BoE Weigh on GBP?
Looking ahead to Friday, the Pound (GBP) could continue to slide against the South African Rand (ZAR) following a speech from the Bank of England’s (BoE) Governor, Mark Carney.
If Carney discusses monetary policy or his tone is overly dovish, Sterling could slide.
Meanwhile, it is likely that the South African Rand will remain under pressure from ongoing trade tensions.
If reports reveal that US-China trade tensions increase, risk appetite will likely slide and the Pound South African Rand (GBP/ZAR) exchange rate may rise.