With an absence of domestic data on Friday for either the UK or South Africa, the Pound to South African Rand exchange rate has strengthened as a result of weak risk sentiment following a hawkish outlook on monetary policy from the Federal Reserve.
The Pound Sterling to South African Rand exchange rate is currently trending in the region of 18.1750.
In the build up to the Scottish independence referendum trader anxiety caused Sterling to depreciate by quite an extent. A succession of confusing polls which showed different results and the lead changing hands constantly only aided trader risk aversion.
Friday saw Sterling gain exponentially against the South African Rand after the result from the Scottish independence referendum saw the Unionists victorious. This eased concerns over Sterling devaluation, shared currency and portioning national debt. Later on Friday, however, Sterling softened across the board after traders opted to lock in their profits after such an impressive surge in demand.
South African Central Bank Governor Gill Marcus stepped down on Thursday. After deciding to keep interest rates on hold at 5.75% the 65-year old Governor made the announcement during a Monetary Policy Committee news conference. She said; ‘This is my last MPC. I have advised the President some time ago that I would not be available for renewal’. The Rand lost around half a cent against the US Dollar after the announcement was made.
The Pound Sterling to South African Rand exchange rate is currently trending in the region of 18.0180.
With a complete absence of UK economic data on Monday, the Pound Sterling has experienced minimal movement against the majority of its most traded currency peers. Any downtrend can be attributed to either foreign currency movement or renewed anxieties over Scottish devolution.
Prime Minister David Cameron is under intense pressure from Conservative backbenchers because of the powers offered to Scotland in the panic surrounding the closeness of the vote. Cameron vowed to give tax-raising powers to the Scottish Parliament ‘in tandem’ with the restriction of Scottish MPs voting on English matters. All the uncertainty surrounding Scottish devolution has caused negative sentiment towards Sterling which is already trending lowly due to trader profit buying.
Monday’s economic calendar is particularly sparse and includes an absence of South African domestic data. The South African Rand is struggling against weak risk-sentiment after the Federal Reserve’s outlook on monetary policy had a hawkish tone. The prospect of an early 2015 interest rate revision has seen demand for the US Dollar rocket in the hopes of serious profit from long-term investment. Emerging market currencies such as the South African Rand have suffered from the fallout of US Dollar dominance.
The South African Rand is also battling against global cuts to commodity prices. Raw materials such as iron ore have decreased in value after Chinese and US data indicated that supply outweighs demand, and gold has also fallen to an 8-month low.
The Pound Sterling to South African Rand exchange rate has reached a high today of 18.2160.
UPDATE
The Pound Sterling to South African Rand exchange rate is currently trending in the region of 18.1959.
Having softened across the board due to a combination of a bullish US Dollar and weak risk sentiment; the South African Rand is slowly rebounding after Chinese factory output was better-than-expected.
The HSBC Chinese Manufacturing PMI was expected to fall to the point that separates growth from contraction (50.0), but the actual data rose from the previous figure of 50.2 to 50.5. Commodity prices have started to recover, and emerging market currencies are less affected by the strength of the US Dollar.
