Firstly, the British economy. Since 2008 and the global recession, the UK is trying to recover. Quantitative easing, which is to spend money on goods and services to try to stimulate supply, has inevitable consequences but does not allow the economy to return to its former state. The Bank of England loan rate, as well as the conventional method of trying to stimulate and control the economy, reached a deficient level of 0.5%. This means that money is cheap to borrow, which should help spend it in the marketplace. However, it also means that the pound is not very attractive to foreign investors, only because it does not cover many interests.
However, the British economy is the second-largest in the European Union, second only to Germany, and the UK is the second-largest exporter of services in the world and the eighth largest exporter of goods. The global economic crisis came after several decades of growth. The trade balance is not very good, with a large trade deficit, but the UK is still such massive power in the world that it seems incredible that Britain will not be able to get out of its current problems.
The economy of South Africa is very different. For example, she suffered from apartheid for a long time, and in practice, there are still many racial problems, even if those times were ending. South Africa is one of the best economies in the African subcontinent, but that does not mean that it works well for all of its citizens. There are still significant differences between the wealthiest groups living in large cities and those living in poverty in the country.
From a macroeconomic point of view, South Africa is in an excellent economic position. It is a country rich in natural resources, which includes not only gold and other precious materials but also fossil fuels such as oil and gas. However, natural resources accounted for only about a third of the growth over the past ten years, and the rest was in other industries such as transport, telecommunications, and manufacturing.
One problem is that South Africa depends on its export trade, and of course, because of the global economic downturn, this has had a significant impact on its economic growth. By combining this with civil unrest, there will be an economy with all the components of healthy and growing growth, but with many question marks about whether this can happen, as it should.
Trading GBP/ZAR requires traders to analyze the fundamentals as well as perform technical analysis to determine the mood of the market and figure out when to enter and exit the bets.
When you bet on GBP/ZAR, you have the opportunity to either “buy” or “sell” a bet, and it is vital that you clearly understand what each of them means. Since Forex bets are always made in two currencies, you should pay attention to which money is named first. Since the pound is named first in this pair, a bid on a long position or a purchase means that you think that the pound will increase in price, and a bet on a medium or short position means that it will decrease. However, since the values are relative, a short bet or a sell bet implies that you think the South African rand is increasing in price and the long bet is against the South African rand.