The Pound Sterling to South African Rand (GBP/ZAR) exchange rate has seen the Pound retain its gains against the Rand since yesterday.
Optimistic Growth Indicator Sees Gains for Pound Sterling (GBP), Consumer Confidence Results Dampen Overall Success
Following an optimistic Growth Indicator report for the UK from the Confederation of British Industry (CBI), the Pound Sterling (GBP) has risen against the South African Rand (GBP/ZAR) today by 0.2%. The report stated that the UK ‘firmed up’ over the last three months, which has prompted optimistic speculation about the expansion of the UK economy later in the year.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate has also seen gains, with a rise of 0.6%. Elsewhere, however, the Pound has levelled out against the Australian Dollar (GBP/AUD) and the Euro (GBP/EUR), where it has trended in a narrow range. This is likely due to an unexpected decline in the UK GFK Consumer Confidence Survey for July, which showed a -3 point drop from 7 to 4.
Earlier…
After the Federal Open Market Committee (FOMC) meeting last night, the South African Rand (ZAR) has declined against the Pound Sterling (GBP), and this fall seems set to continue.
Positive Growth for US Dollar (USD) harms the South African Rand (ZAR), Gold Demand Remains a Pressing Issue
Although the FOMC did not explicitly state that it will be increasing the US interest rate this year (possibly as early as September), the Committee’s statement has made a rate hike highly probable, due to the US’ continuing economic growth and falling unemployment levels. This has spelt bad news for the Rand, as an interest rate increase will add to the pressures that the country’s commodities face and further decrease their value.
The Pound Sterling rose against the Rand (GBP/ZAR) by 0.8% today, and this gain was matched by advances by the Euro (EUR/ZAR) and the US Dollar (USD/ZAR) by more than 0.5%.
Earlier…
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate has risen today; this comes after the Rand briefly rallied following news from the Chinese stock market.
Pound Sterling to South African Rand (GBP/ZAR) Exchange Rate News: Reduced Chinese Gold Demand Damages Performance
The Pound Sterling rose against the South African Rand (GBP/ZAR) today by 0.4%; this comes at a time when the Pound also saw significant gains of over 0.5% against the Australian Dollar (GBP/AUD), the New Zealand Dollar (GBP/NZD), the Thai Bhat (GBP/THB) and the Turkish Lira (GBP/TRY). This rise is due to the UK June Net Consumer Credit and Mortgage Approval data coming through today; both results were positive and exceeded forecasts.
Meanwhile, the South African Rand has declined since yesterday, when news that the Chinese government would be stepping in to stabilise the chaotic Chinese stock market sent the Rand and the ‘Aussie’ on an uptrend against their competitors. This reversal comes after today’s estimates that Chinese gold importing may fall by as much as 40% this year; both South Africa and Australia have heavily developed gold mining industries and rely on Chinese demand to raise the price of their exports.
South African Rand to Pound Sterling (ZAR/GBP) Exchange Rate May Reverse if FOMC Indicate Interest Rates May Remain on Hold
As a commodity currency, the value of the South African Rand (ZAR) is tied to the performance of the US Dollar (USD). Most global commodities are priced in USD, so an improving ‘Greenback’ means a subsequent decline for commodity prices. The Federal Open Market Committee is due to meet today to discuss the US interest rate; if the policy statement following the gathering implies that the FOMC is looking to leave the US interest rate on hold until the end of the year, then it will instead benefit the Rand and other commodity currencies.
South Africa has benefitted from positive employment news today, as the Q2 Unemployment Rate has dropped from 26.4% to 25%. However, this positive development is unlikely to have a major impact on the Rand’s performance as the country still has the 16th highest unemployment rate in the world, coming in three places lower than the 13th country on the list, Greece.
Pound Sterling to South African Rand Exchange Rate Forecast: GBP/ZAR Likely to continue Uptrend
For the near future, at least, it seems unlikely that the South African Rand (ZAR) will reverse its decline against the Pound Sterling (GBP), as the Pound has continued to rise today after the positive UK data releases.
However, the June South African Producer Price Index (PPI) is due for release tomorrow and forecasts are optimistic for the year-on-year (YoY) results, with speculators predicting a 4.32% increase over last year’s 3.6%. Should this result exceed expectations, it is possible that the Rand will bounce back against the Pound, although the drop in Chinese gold imports is a crushing loss for the South African economy and may continue to hamper the Rand’s overall performance.
Current GBP, ZAR Exchange Rates
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate was trending in the region of 13.3462 and the South African Rand to Pound Sterling (ZAR/GBP) exchange rate was trending in the region of 0.0509 today.
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