In spite of the fact that traders have adopted risk aversion strategies on Wednesday after digesting a negative revision to global growth forecasts; Sterling is holding in a low position against the South African Rand. This could be as a result of negative sentiment towards the Pound on fears of overvaluation, or could be as traders await the Bank of England Rate decision, due to take place on Thursday.
The Pound Sterling to South African Rand exchange rate is currently trending in the region of 18.0137.
Over the past few days Sterling has depreciated against many of its most traded currency competitors after comments made regarding Sterling overvaluation. Bank of England officials Ben Broadbent and Kristin Forbes stated that inflationary pressures could potentially be a result of the high value of the Pound and are making it difficult to normalise monetary policy. Business Secretary Vince Cable parroted these views stating that Sterling is around 10-15% too high.
These comments overshadowed generally positive British economic data on Tuesday and Sterling depreciated against higher-yielding currencies as a result.
South African data on Tuesday had been less impressive. Foreign Exchange Reserves declined from $49.767 billion to $49.130 billion.
The Pound Sterling to South African Rand exchange rate has hit a low today of 17.9280.
Wednesday’s British data has been mixed but errs towards the positive. The three-monthly Halifax House Prices met with the market consensus of a drop from 9.7% to 9.6%. On a monthly basis, however, house prices were shown to have increased beyond the median market forecast in September.
A complete absence of South African data on Wednesday has seen the Rand generally depreciate against the majority of its most traded currency peers.
In the aftermath of the International Monetary Fund report, which indicated that global growth was slower than anticipated, traders have adopted risk aversion strategies. As an emerging market currency the South African Rand is likely to suffer from curbed risk sentiment.
Additionally, slightly disappointing Chinese data has compounded trader risk aversion. Both the Chinese composite and services PMIs declined from their previous figures.
Forecast for the Pound Sterling to South African Rand Exchange Rate
Thursday will be an important day in terms of British economic data. The Bank of England Asset Purchase Target and Rate Decision ought to provoke Sterling volatility.
In terms of South African data, Thursday will also be influential on Rand movement. Mining Production and Manufacturing Production have the capability of sparking Rand movement.
The Pound Sterling to South African Rand exchange rate has reached a high today of 18.0490.
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,0.0893,
South African Rand,,Euro,0.0705,
South African Rand,,Pound,0.0555,
South African Rand,,Australian Dollar,0.1016,
[/table]
