GBP/ZAR Exchange Rate Skyrockets Amidst Coronavirus Concerns
The Pound to South African Rand (GBP/ZAR) exchange rate is trading at a fresh two-week high this morning.
At the time of writing the GBP/ZAR exchange rate is trading at around ZAR21.8201, having soared roughly 1.5% from this morning’s opening rate.
South African Rand (ZAR) Stumbles on Coronavirus Resurgence Fears
The South African Rand (ZAR) has fallen sharply against the Pound (GBP) and majority of its other peers this morning as renewed coronavirus concerns weigh on market sentiment.
With many countries around the world still reporting record surges in coronavirus infections, analysts are growing increasingly anxious over the economic impact.
This is highlighted by recent comments from the Chair of the Federal Reserve Jerome Powell, who weighed in on the alarming rise in US coronavirus cases through July following the US central Bank’s latest policy meeting.
‘Sharp increase in coronavirus cases means the US has entered a new phase in containing the virus, which is essential to protect both our health and our economy.
‘The path forward for the economy is extraordinarily uncertain… the pace of the recovery looks like it has slowed since cases began that spike.’
This comes as South Africa is also facing a sharp rise in new cases, which continue to place significant pressure on the country’s much beleaguered economy.
In an effort to help support the economy the South African Reserve Bank (SARB) recently slashed interest rates to a new record low of 3.5%. But as the country continues to suffer will the bank be forced to take more drastic action?
Pound (GBP) Faces Potential Brexit Hurdles
At the same time, while the Pound (GBP) is currently enjoying some bullish momentum carried through from earlier in the week, there remains a clear risk that Brexit uncertainty could undermine Sterling through the latter half of the session.
This comes as the latest round of Brexit trade talks between the UK and EU are set to come to a conclusion, marking the end of July’s ‘intensified’ negotiations.
While Boris Johnson may have predicted that a trade deal could have been completed in July with a ‘bit of oomph’ the reality is that talks appear to have made very little progress, with the two sides diametrically opposed on a number of key issues.
Such an outcome is unlikely to come as much of a surprise to GBP investors, but will still come as a disappointment.