On Monday the Pound was trading in a slightly stronger position against the South African Rand in spite of UK-based concerns.
Having originally believed the Scottish bid for independence to be somewhat of a joke; Westminster politicians must be quaking in their boots after poll after poll indicates just how close the vote will be. With anxieties brewing over the many unknowns traders have generally opted for risk aversion strategies; avoiding large investments in Sterling.
The Pound Sterling to South African Rand is currently trending in the region of 17.9090.
A fresh poll on Scottish independence on Friday showed the voting to be in favour of the pro-unionists. This allowed Sterling to notch up a few gains against many of its major competitors in spite of worse-than-expected UK construction output.
Meanwhile, the South African Rand has struggled after Thursday’s domestic data indicated economic issues. Year-on-year Mining Production declined from the previous figure of -5.4% to -7.7% despite having shown a positive growth of 0.4% in July. Yearly Manufacturing Production showed a massive fall from the previous figure of 0.2% to -7.9%.
The Pound Sterling to South African Rand exchange rate has hit a low today of 17.8710.
Monday’s British economic data has produced some impressive results, although the impact is unlikely to register with Scottish referendum anxieties dominating trader focus. Rightmove House Prices showed growth of 0.9% in September with the yearly figure gaining 2.6% to 7.9%.
An absence of South African economic data on Monday has seen the Rand continue to be affected by Thursday’s less-than-impressive publications. However, the South African Rand has experienced slight gains from the recent announcement that the government intends to give Eskom Holdings Ltd (responsible for providing around 95% of South Africa’s power) a large capital injection. South Africa’s Pretoria-based National Treasury said; ‘Cabinet approved a package to support a strong and sustainable Eskom to ensure that the energy security of the country is maintained, as well as supporting gross domestic product growth’.
The Pound Sterling to South African Rand Exchange Rate Forecast
There will be several important economic events over the coming week, all of which are likely to spark currency market volatility.
On Wednesday the Bank of England will publish the minutes from its most recent monetary policy meeting. Although there weren’t any significant changes in policy from the last meeting; economists will scrutinise the minutes closely in order to gauge the timing of future rate revisions and to find out whether the decisions were unanimous or if there were, once again, dissenters.
Wednesday will also see the Federal Reserve making their decision on interest rates. Whatever the result it is very likely to cause wider market movement as a dovish report would see other currencies benefit, and a hawkish tone is likely to result in a continuation of the US Dollar’s bullish run.
The conclusion to the voting for Scottish Independence is due on Friday night; although the result may not be clear until Saturday morning. Expect many currencies, especially Sterling, to hold ahead of the key decision.
