As traders await the key British Gross Domestic Product estimate; Sterling has experienced minimal gains from better-than-forecast annual industrial and manufacturing output readings. Meanwhile the South African Rand has dipped against many of its currency peers on Tuesday after a decline in local foreign reserves, even after the positive reaction to the appointment of the new central bank Governor.
The Pound Sterling to South African Rand exchange rate is currently trending in the region of 18.0440.
Business Secretary Vince Cable commented on the high value of Sterling on Monday, stating that it was around 10-15% too high. This, he suggests, is the primary reason for slow economic growth and inflationary pressures.
Sterling declined as a result of these comments which emulated those made by Bank of England officials Ben Broadbent and Kristin Forbes previously.
A positive reaction to the appointment of Lesetja Kganyago as the new head of the South African Central Bank saw the Rand make gains against many of its most traded currency rivals at the beginning of the week.
‘Kganyago has been a member of the Monetary Policy Committee, so there will be no significant break or change in the policy,’ Peter Worthington, an economist at Barclays Plc’s Johannesburg-based investment banking unit, said by phone from Cape Town. ‘He will be facing the same challenges that Marcus faced. We have very slow growth and persistent inflation, either above or at the upper end of the target range’.
The Pound Sterling to South African Rand exchange rate has hit a low today of 17.9680.
Tuesday’s British data has printed slightly better-than-expected, although the Sterling gains have been minimal ahead of the key Gross Domestic Product estimate.
Year-on-year Manufacturing Production was forecast to decline from the previous figure of 3.50% to 2.87%, but the actual data revealed production to have increased by 3.90%.
Yearly Industrial Production was expected to drop from 2.20% to 1.84%, but the actual result showed an uptick to 2.50%.
South African data on Tuesday has been less impressive. Foreign Exchange Reserves declined from $49.767 billion to $49.130 billion.
Forecast for the Pound to South African Rand Exchange Rate
It is reasonably likely that the South African Rand will continue to decline over the course of Tuesday and Wednesday without any more domestic data publications to provoke changes. Any movement is likely to be dictated by foreign currency alterations.
The British GDP estimate will dictate how the Pound performs over the rest of Tuesday. With very few economic data publications on Wednesday, the Pound is likely to continue trending in the direction initialised by the GDP estimate.
The Pound Sterling to South African Rand exchange rate has reached a high today of 18.0740.
South African Rand (ZAR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
South African Rand,
,US Dollar,0.0889,
South African Rand,,Euro,0.0906,
South African Rand,,Pound,0.0553,
South African Rand,,Australian Dollar,0.1012,
US Dollar,,South African Rand,11.2447,
Euro,,South African Rand,14.1692,
Pound Sterling,,South African Rand,18.0593,
Australian Dollar,,South African Rand,9.8796,
[/table]
