GBP/ZAR Outlook: Slightly weaker, but likely to move sideways, reflecting its position below the recent average and amidst mixed signals.
Key drivers:
- The Bank of England is adopting a cautious approach to interest rates amid recession warnings linked to potential US tariffs, which may weigh on the GBP.
- The South African Reserve Bank's recent interest rate cut aims to stimulate growth, contributing to the ZAR's strength.
- Oil prices have shown volatility, with recent rises supporting the rand, as South Africa has significant exposure to commodities.
Range: GBP/ZAR is expected to hold within its recent range, with limited movements influenced by ongoing economic concerns for the UK.
What could change it:
- An unexpected improvement in UK economic data could boost the GBP.
- Further deterioration in UK growth prospects or continued US tariff developments could weaken the GBP further.