Slow global economic growth and bets that the Federal Reserve will push back interest rate hikes has seen increased demand for a store of wealth, allowing gold to advance to the highest level in almost four weeks. As gold is the largest export of South Africa, the Rand has appreciated against many of its most traded currency competitors. A lack of British data and general negative sentiment has seen the Pound fall against the majority of its rivals.
The Pound Sterling to South African Rand exchange rate is currently trending in the region of 17.7790.
Cooling UK construction output saw Sterling depreciate on Friday having fallen from 4.3% to -0.3% on a yearly basis with a contraction of -3.9% in August. The slow construction output overshadowed better-than-expected trade balance data as investors focussed on concerns over global economic growth, or the lack thereof.
A report from the International Monetary Fund expressed concerns over the slow pace of economic recovery and the excessive risk taking on global markets. This has tempered bets on the timing of rate hikes in spite of the fact that the IMF report linked the prolonged period of low rates to the misguided risk taking.
Diminished trader risk sentiment had allowed emerging-market currencies, such as the South African Rand, to depreciate against safe-haven assets. A complete absence of South African data on Friday compounded the Rand downtrend.
The Pound Sterling to South African Rand exchange rate has fallen to a low today of 17.7751.
On Monday the Pound declined to a fresh weekly low against the South African Rand amid continued bets that the Bank of England will delay the timing of rate increases until the global economy shows signs of recovery.
September’s Lloyds Consumer Barometer finds a net 10% of consumers think that their employment prospects are better than a year ago, up 4 from August. However, the net balance of consumers who feel their own job is secure, compared to a year ago, stood at 0. The combined average of job security and employment prospects hit 5%, up 1% to a fresh record high in the Lloyds data series.
This better-than-expected employment confidence report hasn’t been enough, however, to overshadow concerns over global economic disparity.
An absence of South African data on Monday has probably been beneficial for the Rand which has appreciated from rising bullion prices. ‘Gold is going to be doubly influenced by both the equity markets and the Dollar over the course of the week,’ Edward Meir, an analyst at INTL FCStone Inc., wrote in a note. ‘Both will continue to drop over the short term, offering a measure of support to prices.’
Forecast for the Pound to South African Rand Exchange Rate
Tuesday’s British inflation data will be of high significance for those trading the Pound. As one of the principle hurdles preventing a benchmark rate increase, those invested in Sterling will be hoping that inflation better correlates with labour market data.
With nothing in terms of South African data until Wednesday, Rand volatility will be dictated by foreign currency changes and commodity market alterations.
The Pound Sterling to South African Rand exchange rate has reached a high today of 17.8850.
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,0.0907,
South African Rand,,Euro,0.0715,
South African Rand,,Pound,0.0563,
South African Rand,,Australian Dollar,0.1036,
[/table]
