The GBP/ZAR currency pair is a popular one on Forex market. As South Africa does an active trade with the United Kingdom, the experienced traders choose this trading instrument for the high stability and predictability of the Great Britain and South Africa's economies. The most intense GBP/ZAR bidding is observed during the European sessions.
This pair is the cross rate against the U.S. dollar. There is no the U.S. dollar in this currency pair, nevertheless, it wields an enormous influence over the pound and the rand. To see it graphically, just combine the GBP/USD and USD/ZAR charts in the same price chart, and you will get the approximate GBP/ZAR chart.
The U.S. dollar affects both currencies profoundly. Hence, for a better prognosis on the future rate movement of this currency pair, you should take into account the main indicators of the U.S. economy. There are such indicators as the interest rate, GDP, unemployment, new workplaces indicator and many others. Keep in mind that the aforementioned currencies may respond in a different manner to the changes in the economic situation of the U.S.A.
The South African rand is one of the most widespread currencies, which is used in many trading operations. The huge reserves of the mineral resources allow South Africa to be the richest country of its continent. Its economy is concentrated on mining with a further export of minerals. Moreover, one of the major stock exchanges that is in the top 10 world's largest stock exchanges, is situated in South Africa.
South Africa specializes in extraction of precious stones and metals, including gold and diamonds. Since the country is the leading car manufacturer in Africa, the majority of its products goes on export. As you can see, South Africa does not suffer from the shortage in raw materials. Among the factors, which can affect the rand rate, are prices for precious gems and metals, as well as level of engineering production.
Remember that the spread for the cross rates can be higher than for more popular currency pairs. Thus, before you start dealing with the cross currency pair, learn thoroughly the broker's conditions for this specified trading instrument.