GBP/ZAR Outlook: Slightly weaker, but likely to move sideways, as the rate is below its recent average and has no clear driver pushing it strongly in one direction.
Key drivers:
- Rate gap: The Bank of England (BoE) is expected to maintain its rates, while the South African Reserve Bank (SARB) recently cut rates, widening the interest rate differential in favor of the ZAR.
- Risk/commodities: Oil prices are currently volatile and above their average, which could affect the rand positively due to South Africa's dependence on commodity exports.
- One macro factor: UK inflation trends are projected to decline, which may push the BoE towards future rate cuts, affecting GBP stability.
Range: GBP/ZAR is likely to drift within its recent range, staying between 21.72 and 22.83 without testing extremes.
What could change it:
- Upside risk: A surprising upward revision in UK growth data could strengthen the GBP.
- Downside risk: Further rate cuts by the BoE could increase downward pressure on GBP against ZAR.