Pound Sterling South African Rand (GBP/ZAR) Exchange Rate Flat after GBP’s Three-Day Rally
The Pound Sterling South African Rand (GBP/ZAR) exchange rate was remained flat on Friday morning, leaving the pairing trading at around R19.2375.
At the end of the week, Sterling edged lower against the Rand after its recent rally sparked by Brexit optimism.
Meanwhile, Rand sentiment increased on optimistic US-China trade comments from US President Donald Trump.
On Thursday evening, Trump noted that talks were ‘moving right along’ despite Beijing continuing to maintain its stance that tariffs would need to be rolled back in order to secure a deal.
However, China has reacted angrily to both Trump’s support of anti-government protests in Hong Kong and US legislation on China’s Uighur Muslim population.
The US House of Representatives passed the Uighur Act, calling for the ban of US exports that can be used for surveillance of individuals.
Following this, an anonymous Chinese source told Reuters that while Beijing could tolerate the earlier Hong Kong bill, the new act could jeopardize a ‘phase one’ deal.
While the Rand benefitted from an increase in risk appetite, gains were limited and in a note discussing trade discussions, Jeffrey Halley, a senior market analyst at OANDA wrote:
‘Although progress towards an interim agreement has taken on a Brexit-like tortuousness, at least both sides appear to be still talking.
‘Trade headlines will continue to flip-flop sentiment in an already-volatile cocktail next week.’
Pound (GBP) Headed Towards Best Week Since October
Friday saw the Pound slip after a three-day rally. Despite the currency remaining flat against ZAR, Sterling was still hurtling towards its best week since mid-October.
Opinion polls revealing the Conservatives are likely to secure a majority in next week’s election buoyed GBP over this week.
If Prime Minister Boris Johnson is able to secure a majority it will allow him to take the country out of the EU by the end of January.
Markets remained optimistic that a Conservative win in Thursday’s election will end more than three years of Brexit uncertainty.
However, even if the party secures a majority, some analysts have argued that further Pound gains will be limited.
Pound Rand Outlook: Will Brexit Optimism Send GBP Higher?
Looking ahead to next week, the Pound (GBP) could rise against the Rand (ZAR) if investors continue to remain optimistic that next week will see the Conservatives win a majority.
A Tory majority will likely cause Brexit optimism to rise, and buoy Sterling.
Meanwhile, Tuesday’s South African manufacturing production data could weigh on the Rand.
If production slumps further than expected at the start of the fourth quarter, the Pound South African Rand (GBP/ZAR) exchange rate will edge higher.
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TAGS: Pound Rand Forecasts