Dollars, Pounds To Rand Exchange Rate

Dollars, Pounds To Rand Exchange Rate

During the first week of last week, the rand remained sluggish. On Tuesday, the South African rand began at R20.59 versus the British pound and closed at R20.64. The GBP/ZAR pair had broken past the R20.87 mark by Thursday and was trading at R20.99 on Friday. The rand was at its lowest level since January 2022.
Last week, most big economies central banks maintained their hawkish language. The Bank of England (BoE), for example, raised interest rates by 25 basis points on Thursday. The Bank of England has been talking about inflation, which has risen sharply in recent months. This year, its main focus will be on combating inflation with a more active monetary policy.
The European Central Bank (ECB) has taken a more hawkish stance at its last press conference where ECB president, Christine Lagarde, reiterated the phasing out of the PEPP. Conversely, many consider the South African Reserve Bank (SARB) not hawkish enough, considering inflation is nearing its target of 6%.
The biggest weight on the rand now is the reintroduction of loadshedding. Eskom announced on Friday that loadshedding was scheduled for the weekend and would end on Monday. This was the first instance of loadshedding for 2022 and does not bode well for South Africa’s pandemic recovery.
This coming week, the State of the Nation Address is scheduled for Thursday. Investors will be looking for government programs that will stimulate the local economy. Investors will also be interested in any plans for addressing Eskom’s electricity production woes.

Weekly market events

Tuesday 8 February  
US:  Balance of trade
Wednesday 9 February  
SA: SACCI Business confidence
Thursday 10February  
SA: Mining production
SA: Manufacturing production
SA: State of the Nation Address
US: Inflation data
Friday 11February  
UK: GDP data
US: Consumer confidence

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