The Pound to South African Rand (GBP/ZAR) exchange rate gained 0.4% during Tuesday’s European session.
The US Dollar to Rand exchange rate was also trending in a stronger position as the appeal of the emerging-market Rand was significantly compromised by global economic developments.
A slight easing in tensions in Ukraine, Gaza and Iraq did help the Rand enjoy a brief show of strength against the US Dollar, but the pairing returned to trending in a narrow range amid an absence of economic news for South Africa.
Given the amount of geopolitical uncertainty witnessed in recent weeks, some industry experts have expressed surprise over the Rand’s resilience.
According to one RMB trader; ‘Dealers are confounded by what caused the Rand to weaken earlier and the sudden strength we’re seeing now. It may be more of an emerging-market story. There seems to be a lid on geopolitical tension for the time being, which favours risk-on trade.’
The GBP to ZAR exchange rate was little-affected by the British Retail Consortium’s Like-for-Like Sales report.
According to the data, UK retail sales fell by -0.3% on a like-for-like basis in July from the same period of the previous year.
This followed an annual decline of -0.8% in June and was much weaker than the 0.9% increase anticipated.
The BRC’s three-month average total sales growth came in at 1.3%, well shy of the twelve-month average of 2.3%.
In a statement issued with the figures Helen Dickinson, Director General of the British Retail Consortium, asserted; ‘This July we have achieved overall growth of 1.3 per cent year on year, which at first glance compares unfavourably with the 2.3 per cent long-term rate over the last twelve months. However, July last year was a tough month to beat because consumers had really responded well to high profile exciting sporting events and of course, the birth of the royal baby. […] Non-food online sales continued to show strong growth, the third highest this year, driven notably by furniture, kitchen appliances, gaming and toys.’
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate hit a low of 17.7910.
Pound to South African Rand (GBP/ZAR) Exchange Rate Forecast
Tomorrow’s South African Retail Sales report could inspire notable movement in the GBP/ZAR exchange rate.
A positive result could help the Rand strengthen against the Pound.
However, investors will also be paying close attention to the UK’s employment figures and the Bank of England’s Inflation Report.
Signs that the BoE might increase interest rates in November or a better-than-anticipated average wage growth figure would be Pound beneficial.
The Pound Sterling to South African Rand exchange rate hit a high of 17.9180.
Undesirable UK Labour Market Results Soften GBP/ZAR Exchange Rate
The Pound Sterling to South African Rand exchange rate is currently trending in the region of 17.7420.
Today was heavy in terms of UK domestic data releases; but the large docket did not support a surge for the Pound.
At first glance it seems that the ILO Unemployment Rate figures, which met with the forecast, would bolster the Pound’s performance. However, when paired with Average Weekly Earnings the positive unemployment rate is somewhat micrified.
Average weekly earnings showed a loss against the forecast figure of -0.1% to -0.2%. Whilst this may only seem to be a fractional decline, the previous figure posted was far more impressive at 0.4%.
These undesirable results do not bode well for rate hike speculation ahead of today’s Bank of England Inflation Report.
Expect some movement for the South African Rand today with the release of the year-on-year retail sales data.
South African Rand (ZAR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,South African Rand,17.8827,
Euro,,South African Rand,14.2257,
US Dollar,,South African Rand,10.6613,
Australian Dollar,,South African Rand,9.8765,
New Zealand Dollar,,South African Rand,9.0509,
Canadian Dollar,,South African Rand,9.7225,
[/table]
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