After a speech given by Bank of England Governor Mark Carney at the TUC Congress in Liverpool on Tuesday morning Sterling has strengthened considerably. Mark Carney’s unwillingness to share the Pound, if Scotland gains independence, has given a positive boost to the hopes of the Unionists.
The Pound Sterling to South African Rand exchange rate is currently trending in the region of 17.5600.
The white cross of Scotland dominated the media on Monday after a YouGov poll on the Scottish referendum showed that the Unionists had lost their early lead with the Nationalist vote at 51%. Investors were spooked by the prospect of a divided Britain and pulled away from Sterling in droves.
With an absence of domestic data the South African Rand experienced negative movement due to a surging US Dollar. As speculation increases on a near-future Federal Reserve benchmark interest rate increase demand for the US Dollar has been elevated considerably.
The Pound Sterling to South African Rand exchange rate has hit a low today of 17.2740.
Tuesday has seen a slight reversal in fortune for the Pound after Bank of England Governor Mark Carney addressed the TUC Congress in Liverpool. He intimated towards the possibility of a rate hike in spring of next year suggesting that the BoE are on track to achieve that objective. Whilst that did initially spark some interest his following words on the current situation regarding Scottish independence had the effect of seeing Sterling gather momentum against many of its major rivals. Carney said; ‘You only have to look across the continent to look at what happens if you don’t have those components in place. A currency union is incompatible with sovereignty’.
The South African Rand has lost some ground today after the South African current account showed a greater declination than forecast. Having been forecast to fall fractionally from the previous figure of -161 billion to -161.8 billion the actual Current Account data showed further contraction to -222.0 billion. South African Business Confidence, however, rose from the previous figure of 41.0 to 46.0.
A slight boost for the Rand came on Tuesday after FirstRand Ltd. (FSR), Africa’s biggest bank in terms of market value, revealed that it is spending 10 billion Rand to expand across the continent. ‘We’ve got a provisional license in Ghana and should be up and running there in early 2015,’ Sizwe Nxasana, chief executive officer of the Johannesburg-based bank, said by phone today. ‘In time we’ll set up operations in Kenya and Angola’.
Forecast for the Pound Sterling to South African Rand Exchange Rate
Wednesday’s solitary British economic data publication will be highly influential in terms of Sterling movement. Several important policymakers at the Bank of England (including Governor Mark Carney, David Miles, Martin Weale and Nemat Shafik) will be gathering to testify on the August inflation report.
Thursday will see a couple of important economic data publications. Both Mining Production and Manufacturing Production could spark volatility for the Pound to South African Rand exchange rate.
The Pound Sterling to South African Rand exchange rate has hit a high today of 17.6250.
UPDATE
On Wednesday the Pound Sterling to South African Rand exchange rate gained by over 0.2% as investors favoured the British asset over its higher-risk, emerging-market peer.
The Rand drifted lower against almost all of its most-traded currency counterparts as investors focused on the patchy nature of recent economic reports for South Africa and the prospect of the US Federal Reserve bringing forward its timeline for increasing interest rates.
Tomorrow volatility in the GBP/ZAR exchange rate could be caused by South Africa’s mining production and manufacturing production figures .
UPDATE 2
The Pound (GBP) managed to advance to its best level in a month against the South African Rand (ZAR) on Friday, as demand for riskier emerging market assets were weighed upon by geopolitical concerns and a strengthening US Dollar (USD).
Geopolitical concerns over Russia facing fresh sanctions from the European Union and the US over the Ukraine crisis and worries the negative implications for South Africa’s Gross Domestic Product (GDP) after the release on Thursday of weaker than expected local manufacturing and mining production figures ensured that pressure remained upon the Rand.
Sterling meanwhile was still finding support from easing concerns over the Scottish Referendum vote, but it is set to remain volatile.
