The Pound Sterling to South African Rand (GBP/ZAR) exchange rate surged by over 0.6% on Monday.
Higher risk currencies like the Rand came under some pressure as a result of ongoing tensions in Ukraine and Sterling was boosted by moderately hawkish comments from Bank of England Governor Mark Carney.
Carney issued an almost retraction of last week’s dovish remarks regarding subdued wage growth preventing interest rate increases and implied that interest rates could be hiked before average earnings fall in line with inflation.
In other UK news, asking prices for British homes were shown to have posted their steepest month-on-month decline since records began in August.
The -2.9% month-on-month drop prompted Rightmove Director Miles Shipside to note; ‘A drop in August is typical but it’s steeper than expected this year. There are signs the market is effecting its own natural slowdown without [borrowing costs being increased] though underpinned by greater awareness among the public that the five-year holiday of record low interest rates is coming to an end.’
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate hit a low of 17.6510.
The US Dollar to South African Rand exchange rate (USD/ZAR) was little changed amid a dearth of influential economic reports for either the US or South Africa.
According to industry expert Christie Viljoen; ‘The local unit held around a 100-day moving average of R10.56 against the Dollar, after advancing about R0.30 since the previous Friday. If the local unit fails to breach technical resistance barriers soon we may see some profit taking.’
The Pound Sterling to South African Rand exchange rate hit a high of 17.7820.
Pound to South African Rand (GBP/ZAR) Exchange Rate Forecast
The only South African economic data to be aware of this week is the nation’s inflation figures.
Last week South African Reserve Bank Deputy Governor Daniel Mminele argued that the risks posed to South Africa’s inflation outlook are on the upside amid growing price pressures.
During a speech Mminele was quoted as saying; ‘There are indications that Exchange-rate impacts, particularly the lagged impacts from past depreciations, are starting to feed through into consumer price inflation. While inflationary pressures may not be of a demand-pull nature, second-round price effects from supply-side shocks need to be contained. The MPC has indicated that we are in a tightening phase of the interest-rate cycle. While price stability remains the primary focus of monetary policy, the bank has indicated that this objective will be pursued in a manner so that economic growth outcomes are not duly undermined.’
If the inflation figures show an unexpected acceleration in consumer prices the Pound Sterling to Rand exchange rate could extend its current rally.
The UK’s own inflation figures, retail sales report and Bank of England meeting minutes will also have an impact on the Pound Sterling to South African Rand (GBP/ZAR) exchange rate.
Pound to Rand GBP/ZAR Rate Continues to Trend Higher Despite Poor UK Data, US Dollar to Rand Remains Steady
The Pound to South African Rand exchange rate is trending in the region of 17.6890.
The exchange rate has continued trending higher despite some negative UK domestic data released earlier today. The Consumer Price Index was seen to have dipped from 1.9% to 1.6%. Also the Retail Price Index has fallen from 256.3 to 256.0. The disappointing data has had little effect on the Pound to Rand exchange rate thus far, however. This may be as a result of the increased demand for the Pound following Bank of England (BoE) governor Mark Carney’s interview in which he reignited speculation of a rate hike before the close of the year.
With no domestic data due for release today, expect the Rand to be affected by other currency movement and geopolitical issues.
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,17.6752,
Euro,,South African Rand,14.1691,
US Dollar,,South African Rand,10.6165,
Australian Dollar,,South African Rand,9.8569,
New Zealand Dollar,,South African Rand,8.9839,
Canadian Dollar,,South African Rand,9.7164,
[/table]
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