On Wednesday, the Pound to South African Rand (GBP/ZAR) exchange rate firmed ahead of the release of UK GDP and US data releases.
On Tuesday, the Pound to South African Rand (GBP/ZAR) exchange rate softened as Bank of England policy makers re-asserted their warning that inflation in the UK will dip below 1% over the coming months.
Earlier on Monday the Pound to South African Rand (GBP/ZAR) exchange rate strengthened broadly and more gains are forecast as last weeks Sterling losses were deemed overdone.
Pressures persist on the Rand as power shortages rekindled concerns about South Africa’s ailing economy. Attention is now shifting to Tuesday’s South African Gross Domestic Product (GDP) data.
Economists are forecasting that the report will show that the nation’s economy expanded by just 1.3% in the third quarter of the year, after ticking up just 1% in the second quarter.
‘With a lack of notable events today, we believe that Rand participants will pay most attention to tomorrow’s domestic and international GDP readings. We believe that from a growth differential perspective, Rand risk lies in a softer print,’ said Barclays Africa.
Over the weekend the Rand eased against the Pound as on Sunday South Africa’s major power company Eskon declared a major ‘emergency’ and told industrial users that unless they cut their consumption by 10% the national power grid will fail.
The news, heightened concerns that South Africa’s creaking utility facilities will become a major factor in holding back economic growth.
Also continuing to put pressure upon the Rand is the continuous decline in commodity prices. As one of the world’s major mining nations, South Africa has been negatively impacted by the sharp declines in the value of iron ore and other metals.
Sterling could experience movement as the session progresses as Bank of England Policy maker Ian McCafferty releases text. As McCafferty is one of the two BoE policy makers who voted in favour of raising interest rates economists will be interested at what he has to say.
Pound Sterling to South African Rand (GBP/ZAR) Forecast
If Tuesday’s South African GDP data comes in as or better than forecast we could see the Rand recover ground.
Also due for release on Tuesday is a domestic Business Confidence report which could also offer support.
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,17.2430 ,
Euro,,South African Rand,13.6914 ,
US Dollar,,South African Rand,10.9734 ,
Australian Dollar,,South African Rand,9.3371 ,
[/table]
