In the aftermath of dovish minutes from the Bank of England’s most recent policy meeting, the Pound has tumbled against the majority of its currency peers. Conversely, the South African Rand has strengthened as a result of positive data and improved market sentiment.
The Pound Sterling to South African Rand exchange rate is currently trending in the region of 17.6888.
On Tuesday the Pound suffered losses after economic data printed disappointingly. Public Finances increased exponentially from 1.9 billion to 17.7 billion, and Public Sector Net Borrowing rose from 10.7 billion to 11.1 billion.
An absence of South African data held back Rand gains on Tuesday, although the South African asset did benefit from improved trader risk-sentiment.
The Pound Sterling to South African Rand exchange rate has fallen to a low today of 17.6727.
On Wednesday the Bank of England minutes were published. Although there were the same dissenters as in the previous two meetings, the general dovish nature of the remaining policymakers has overshadowed the duo of hawks.
As it looks increasing likely that the BoE will delay a rate hike for as long as they can, sentiment towards the Bank has taken a dive which, in turn, has seen Sterling plunge. The policymakers who towed the party-line have argued that there isn’t enough inflationary pressure to warrant a rate increase. ‘For these members, there remained few signs of inflationary pressure in the UK economy, even after looking through the effects of a stronger Sterling exchange rate,’ the minutes said.
The two MPC rate hawks argued that low rates could unbalance Britain’s economic recovery.
Wednesday has seen the South African Rand gather momentum after the Inflation Rate fell within the target set by the South African Reserve Bank. Year-on-year Inflation Rate was forecast to increase from 6.4% to 6.5%, but the actual result showed a positive declination to 5.9%.
Adding to the South African Rand uptrend is a vast improvement in trader risk sentiment after geopolitical issues took a back seat in investor focus.
Pound Sterling to South African Rand Forecast to Drop
Although there is a complete absence of South African economic data on Thursday, the Pound to South African Rand exchange rate is likely to continue to soften. This is as a result of negative sentiment towards the BoE for potentially delaying a rate increase until mid-to-late 2015.
Thursday’s British Retail Sales data could provoke volatility for the Pound, although it is forecast to decline which would only aid the Sterling downtrend.
The Pound Sterling to South African Rand exchange rate has reached a high today of 17.8100.
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,0.0906,
South African Rand,,Euro,0.0715,
South African Rand,,Pound,0.0565,
South African Rand,,Australian Dollar,0.1032,
US Dollar,,South African Rand,11.0137,
Euro,,South African Rand,13.9653,
Pound Sterling,,South African Rand,17.6718,
Australian Dollar,,South African Rand,9.6771,
[/table]
