The Pound Sterling to South African Rand (GBP/ZAR) exchange rate was trending in a stronger position on Friday as investors ditched higher risk currencies in favour of safe-haven assets amid exacerbated tensions in Ukraine and Iraq.
The Rand was holding steady against the US Dollar having briefly brushed a week high of 10.6250.
According to economist Christie Viljoen; ‘Expectation of weak local data has been broadly priced in already. Further deterioration in the situation in Ukraine and standoff between Russia and West could hurt emerging market currencies and send the South African currency to beyond 10.86 versus the US Dollar.’
The Pound Sterling to South African Rand exchange rate was little changed following the publication of the Lloyds Employment Confidence Index at 09:30 GMT. The measure rallied from 1 to 6, demonstrating that UK firms are feeling more secure in their economic prospects.
The Rand was little changed against the Euro, trending in a narrow range ahead of tomorrow’s economic sentiment reports for the Eurozone.
Barclays said this of the Rand’s movement; ‘Considering that there were no apparent fundamental catalysts for Rand strength, we suspect that Friday’s move was mainly a function of profit-taking by some Rand participant. Hence, it seems as if the Rand remains well entrenched within a R10.46-R10.86 Dollar range for the time being.’
Pound to South African Rand (GBP/ZAR) Exchange Rate Forecast
Over the next few days risk sentiment will be responsible for much of the movement in the Pound Sterling to South African Rand exchange rate.
If the geopolitical situation deteriorates further, emerging-market assets like the Rand may well lose additional ground.
Rand fluctuations could also be triggered by the South African Retail Sales report (due out on Wednesday) and the nation’s Mining Production data, out on Thursday.
The sales report is expected to show a 0.6% month-on-month gain and an annual increase of 2.2%.
Of course, news from the UK will also impact the GBP to ZAR exchange rate. If the UK’s Employment data (due out on Wednesday) shows a further reduction of slack in the UK labour market the Pound could advance.
That being said, investors will largely be focusing on the UK’s Weekly Earnings figures. If average wages are shown to be running further below the rate of inflation it could undermine the odds of the Bank of England bringing forward its timeline for increasing interest rates and cause Sterling weakness.
The Pound Sterling to South African Rand exchange rate hit a high of 17.9880.
UPDATED 09:40 GMT 12 August, 2014
Pound Sterling to South African Rand (GBP/ZAR) Up 0.3%
Although economic reports for both the UK and South Africa were lacking on Tuesday, the Pound was still able to advance by 0.3% on the South African Rand.
Tomorrow’s South African Retail Sales figures could have an impact on the Pound to Rand exchange rate, as could the UK’s unemployment rate figure and the Bank of England’s inflation report.
A month-on-month sales increase of 0.6% is expected.
If the UK’s average wage growth figure disappoints the Pound Sterling to South African Rand exchange rate could pare some of its recent gains. The ongoing geopolitical tensions will also influence movement in emerging market assets like the Rand.
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,17.9658,
Euro,,South African Rand,14.3191,
US Dollar,,South African Rand,10.6975,
Australian Dollar,,South African Rand,9.8827,
New Zealand Dollar,,South African Rand,9.0090,
Canadian Dollar,,South African Rand,9.7126,
[/table]
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