The Pound Sterling to South African Rand (GBP/ZAR) exchange rate advanced by around 0.94% on Monday morning.
After oil prices slid to a near 6-year low, and with hedge funds betting on continued declination, market sentiment dampened significantly. The emerging-market South African Rand has declined as a result of trader risk-aversion strategies.
The Pound Sterling, conversely, is gaining from low oil prices on the prospect that improved consumer spending will accelerate the UK’s economic recovery. The recent European Central Bank stimulus intervention is also Sterling supportive as the Eurozone recovery is significant for British business and trade.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate is currently trending in the region of 17.2200.
Pound Sterling (GBP) Exchange Rate Gains on Consumption
Although the UK’s growth has cooled of late, with the Eurozone’s difficulties impacting on Britain, low oil prices have spurred consumer spending and allowed growth to continue, albeit at a slower pace than in early 2014. This has seen the Pound strengthen versus many of its major peers, with the latest ECB stimulus measures likely to support Sterling.
‘Growth is pulling back but the recovery hasn’t stumbled,’ said Victoria Clarke, an economist at Investec Securities in London. ‘We’re expecting an improvement in Europe and oil might mean a big boost to consumer spending, with more to come from what we’ve already seen.’
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate dropped to a low today of 17.0760.
South African Rand (ZAR) Exchange Rate Dives on Oil Prices
With the declination in oil causing a reduction in market sentiment, the emerging-market South African Rand softened versus the majority of its most traded currency competitors. Many industry experts forecast continued declination amid a supply glut.
‘I don’t see any major catalyst from either the supply or demand side that will send prices higher this year,’ stated equity analyst Stewart Glickman. ‘It looks like $50 crude is the new reality that we’ll have to get used to.’
Pound Sterling to South African Rand (GBP/ZAR) Exchange Rate Forecast to Hold Gains
With a complete absence of domestic data to curb the trend, and with oil prices showing no signs of recovery, the Pound Sterling to South African Rand (GBP/ZAR) exchange rate is likely to hold gains for the remainder of Monday.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate climbed to a high today of 17.2340.
