The Pound Sterling to South African Rand (GBP/ZAR) exchange rate was trending in a slightly softer position for much of Thursday as the British asset posted widespread declines in the wake of disappointing domestic data.
The Pound was pressured as house price growth in the UK slowed markedly and the nation’s major Consumer Confidence gauge unexpectedly declined.
The Rand did shed some of its gains against the Pound however as economic reports for South Africa were published.
Before South Africa’s trade figures were released analyst Mamello Matikinca commented; ‘While the median forecast is for a slight improvement of the trade deficit, a significant deviation will be Rand negative as it suggests the economy continues to struggle to contain its current account deficit.’
The figures actually revealed that South Africa’s trade deficit narrowed by considerably more than anticipated, with the shortfall narrowing from a revised 7.44 billion Rand in May to 190 million Rand in June.
The unexpectedly pronounced narrowing in the deficit was due to a 3.7% increase in exports and a 5.1% decline in imports.
According to economist Jeffrey Schultz, ‘Any perceived ‘improvement’ in the country’s trade account could lend a hand to the Rand’.
Schultz wasn’t proved correct however as the Rand didn’t rally after the data was released.
The Pound Sterling to South African Rand exchange rate hit a low of 17.9820.
The US Dollar to South African Rand (USD/ZAR) exchange rate, meanwhile, began the day on the back foot as the ‘Greenback’ remained buoyed by the impressive US second quarter growth figure.
The Rand was also steady against its US rival prior to the release of South Africa’s Producer Price Index.
South Africa’s PPI registered a 0.3% month-on-month increase in June, following a gain of 0.2% in May, and was up 8.1% on the year.
On Wednesday the Rand dropped to a 1 ½ week low against the US Dollar as the world’s largest economy was shown to have expanded by 4.0% in the second quarter of the year, wiping out the previous quarter’s positively revised contraction of -2.1%.
South Africa’s domestic reports failed to help the USD/ZAR pairing recover losses on Thursday as the US Dollar continued trending higher in spite of an off-estimate US Initial Jobless Claims report.
However, while initial jobless claims were shown to have increased in the week ending July 26 the less volatile four-week moving average fell to its lowest level for eight years, dropping to 297,250.
This news left the US Dollar to South African Rand exchange rate trending in the region of 10.7258.
Pound Sterling to Rand Exchange Rate Forecast
The GBP/ZAR pairing is likely to continue trading in its current range for the rest of the European session.
Further fluctuations in the pairing could occur tomorrow following the release of the UK’s Markit Manufacturing PMI.
It has been forecast that the measure will decline from 57.5 to 57.2.
A strong result could help the Pound Sterling to South African Rand exchange rate end the week on a firmer footing.
UPDATED 09:15 GMT 01 August, 2014
Pound Sterling to South African Rand Steadies
Yesterday the South African Rand put on a patchy performance following the publication of domestic trade data.
As the trade figures showed a far more pronounced narrowing in the South African trade deficit than economists had anticipated, sparking concerns that the nation can’t keep its trade balance under control, the Rand softened.
There is no South African data to be aware of today so if the UK’s Manufacturing PMI surprises to the upside the Pound could advance on the Rand in the hours ahead.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate is currently trending in the region of 18.0970.
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,18.0708,
Euro,,South African Rand,14.3385,
US Dollar,,South African Rand,10.7137,
Australian Dollar,,South African Rand,9.9498,
New Zealand Dollar,,South African Rand,9.0340,
Canadian Dollar,,South African Rand,9.7757,
[/table]
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