GBP/ZAR Outlook: The outlook is likely to decrease, as GBP is trading below its recent average and near recent lows, pressured by economic concerns tied to potential US tariffs.
Key drivers:
• Rate gap: The Bank of England is cautious about further rate cuts, while the South African Reserve Bank's recent rate cut supports the rand’s appeal.
• Risk/commodities: Oil prices are above average, which could indirectly support the rand, benefiting from the strong performance of South Africa's commodities.
• One macro factor: UK GDP growth projections are weak, with warnings about tariff impacts leading to lower growth expectations.
Range: GBP/ZAR is likely to drift within its 3-month range as it consolidation continues, staying near the recent low levels.
What could change it:
• Upside risk: A unexpectedly strong UK jobs report could boost the pound.
• Downside risk: Further escalation in US trade tensions could amplify pessimism around the UK economy, pushing GBP/ZAR lower.