The pound to rand ( GBPZAR ) is up by more than 1% as the market reacts to the better-than-expected employment numbers from the UK. The South African rand has also dropped by 0.80% against the US dollar and by 0.90% against the euro.
In a report earlier today, the Office of National Statistics (ONS) revealed that the unemployment rate in the UK rose to 4.8% in September. That was in line with the median estimate by a panel of economists polled by Reuters.
In the same month, the average earnings index and bonus increased by 1.3%, higher than the consensus estimate of 1.0%. This increase was better than August’s increase of 0.1%. Without bonuses, wages increased at an annualised rate of 1.9%.
Another report showed that the claimant count change declined by 29,000 in October after falling by 40.2k in the previous month. Analysts were expecting the claimants to jump by more than 50k.
The South African rand is also falling because of news of the new vaccine by Gilead Sciences and BioNTech. Analysts believe that South Africa and other emerging markets will be among the first ones to receive the shots. That will leave these countries at a relatively weak spot.
GBPZAR technical outlook
On the daily chart, we see that the GBPZAR price has dropped by about 15% since March. The price has also moved below the important support at 20.8195, which was the lowest level in June, July, and October. It is also below the green descending trendline.
Therefore, the pair is likely to continue dropping as bears aim for levels below 20.00. However, a move above the now resistance at 20.8195 will invalidate this trend.
Pound to rand technical chart