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GBP/ZAR Forecast: Pound to South African Rand Exchange Rate Near 2021 Worst as Rand Rally Continues

April 9, 2021 - Written by Tim Boyer

Despite concerns about weakness in South Africa’s economy, the British Pound to South African Rand (GBP/ZAR) exchange rate continues to trend lower and lower as the Rand capitalises on the latest market moods. Sterling has been sold on profit-taking and fresh coronavirus vaccine concerns all week, and higher demand for risk and emerging market correlated currencies has kept the Rand broadly appealing in comparison.

Since opening this week at the level of 20.27, GBP/ZAR has trended with a largely downside bias. Towards the end of the week, GBP/ZAR touched on a low of 19.90. This was the worst level for the pair since the end of 2020 and the worst point for GBP/ZAR this year so far.

GBP/ZAR has since steadied slightly but the South African Rand remains strong and continues to pressure the pair near its lows. At the time of writing on Friday, GBP/ZAR trends in the region of 20.00.

Pound Sterling (GBP) Exchange Rates Set for Biggest Weekly Loss of the Year



Investors have been selling the Pound all week. After the British currency struck new highs against some major rivals like the Euro, markets took profit from its strong levels and sold it.

This led to sharp losses, and a shift in market sentiment has only seen continued falls for the Pound.

Britain’s coronavirus vaccination rollout has been perceived as slowing and is no longer considered the furthest vaccination scheme among major economies.

Because of this, the Pound’s relative appeal has been lessening. Investors no longer see Britain’s coronavirus recovery outlook as the most optimistic among major economies.

This week has also seen a rise in concerns around Britain’s usage of the AstraZeneca coronavirus vaccine.

Following concerns in the Eurozone over low numbers of blood clots associated with the vaccine, the UK has suggested disallowing the vaccine for those under 30.

On top of this, optimism around vaccines in other nations such as the Eurozone are rising. According to Marshall Gittler, Head of Investment Research at BDSwiss:

‘The selling of Sterling may have been connected to buying of Euros

It looks like perhaps people are getting more optimistic about the rollout of a vaccine in the EU and less optimistic about the comparable move in the UK.’


South African Rand (ZAR) Exchange Rates Continue to Capitalise on Market Mood



The South African Rand is a currency often correlated to risk and emerging market sentiment. Because of this, it has been reacting to the big shift in market mood this week.

As the safe haven US Dollar was hit lower by the continued dovishness of the Federal Reserve, investors have been more willing to take risks.

Despite the improving global recovery outlook, most central banks are still hesitant to tighten monetary policy due to the huge uncertainty of the pandemic.

This has made investors more willing to take risks to capitalise on the dovishness of banks and look for higher yields. Bianca Botes, Executive Director at Citadel Global, said:

‘Hopes of a global economic recovery as countries continue their vaccination rollout programmes have led to lower yields and ongoing risk appetite,’


This has been the primary cause of broad South African Rand strength this week.

In fact, the Rand continues to climb despite continued signs of weakness in South Africa’s economic outlook.

Recent South African data continues to show poor economic performance for the start of 2021, as the nation struggles with the coronavirus pandemic.

Pieter du Preez, Senior Economist at NKC African Economics, said:

‘This once again highlights the underlying weakness in the economy and continues to point towards a very soft start to the year,

Although we expect the sector to show some sort of recovery over the coming months, it still faces significant obstacles over the short term’


GBP/ZAR Exchange Rate Forecast: Key Data Could Help Pair Recovery



Next week’s UK economic calendar will be a little busier, and could influence movement in the Pound to South African Rand exchange rate if it surprises.

The week’s data will start with a slew of UK data, due for publication on Tuesday.

Stats due for publication include UK growth, trade balance, production and construction output results from February.

As February was the first full month in which Britain was under its third national lockdown, surprising data could give investors a better idea of how Britain’s economy weathered the lockdown.

Of course, stronger than expected UK growth data would boost hopes for a strong economic recovery and potentially bolster the Pound’s appeal next week.

Investors may also be more willing to buy the Pound again if market sentiment calms and investors become more concerned about South Africa’s economic performance instead.

Key South African data due for publication next week includes February retail sales on Wednesday, and February building permits on Thursday.

Any domestic or global developments in the coronavirus pandemic will also be closely watched by Pound to South African Rand exchange rate investors next week.
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