Bias: bearish-to-range-bound, GBP/ZAR sits below its 90-day average and at the lower edge of the three-month range.
Key drivers:
- Rate gap: The BoE is expected to ease toward lower levels in 2026 while SARB has already eased and maintains a comparatively tighter stance, widening the gap in favor of ZAR.
- Risk/commodities: Oil sits above its three-month average with notable volatility, and higher oil tends to support the rand through inflation dynamics and export outlook, while UK energy costs keep sterling under pressure.
- Macro factor: Inflation easing toward the SARB target supports a steadier rand.
Range: GBP/ZAR is likely to drift within the recent band, with a tendency to hover near the lower end unless UK data surprises to the upside.
What could change it:
- Upside risk: Stronger-than-expected UK data or a slower pace of rate cuts by the BoE could lift GBP.
- Downside risk: Renewed risk-off mood or UK data disappointment could push GBP lower.