The Pound Sterling to South African Rand (GBP/ZAR) exchange rate extended its gains quite significantly in Friday’s trading, with a market movement of +0.89%.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate was trending higher during on Friday despite a fall in Bank of England (BoE)/GFK inflation forecast. Declining expectations for a BoE interest rate hike have weighed on the Pound recently, and this week’s developments have contributed to the downtrend.
Bank of England Rate Forecasts Fall – Pound Sterling (GBP) Exchange Rate Lower
The Bank of England decided to keep interest rates on hold at 0.50% after Thursday’s meeting —a development that, while not unexpected, offered little support to the Pound Sterling exchange rate.
The BoE/GFK report read: ‘When asked about the future path of interest rates, 37% said rates might stay about the same over the next twelve months, up from 29% in August. 37% of respondents expected rates to rise over the next 12 months, down from 49% in August.’
South African Power Crunch Undermines South African Rand (ZAR) Exchange Rate
Meanwhile, the South African economy is suffering from falling confidence amid a power crunch.
The South African Rand to Pound Sterling (ZAR/GBP) exchange rate fell when data showed the South African Reserve Bank’s (SARB) net gold and foreign exchange reserves fell from $43.085 billion in September to $42,946 in October.
In addition, gross reserves also fell from $48.678 billion to $48.54 billion.
ZAR/USD Exchange Rate Records 7% Fall
The South African Rand to US Dollar (ZAR/USD) exchange rate has tumbled by over 7% this year after strikes severely damaged the South African economy.
Researchers NKC commented: ‘Fears over the South African economy’s weak fundamentals and how it will cope with rising US interest rates will keep the local unit under pressure going into 2015.’
The South African Rand is likely to remain softer against other currency majors after utility company Eskom announced it would be implementing periods of black-outs.
Eskom stated: ‘The power system has been seriously constrained today, we will begin load shedding today.’
Eskom has come under pressure from increased demand after a diesel shortage.
Load shedding is expected to take place between the hours of 16:00-22:00. The nation has also experienced two consecutive weekends of rolling blackouts.
Eskom representative Andrew Etzinger commented: ‘Unfortunately, it’s necessary to implement load shedding from 4pm this afternoon due to the loss of additional generation off the system which has put us in a difficult situation.’
Etzinger continued: ‘We depleted the diesel in the supply tanks and unfortunately, no fuel means no power coming out of the power stations and the loss of that capacity has put us in a deficit.’
Pound Sterling to South African Rand (GBP/ZAR) Exchange Rate Forecast
As a result of power concerns, the South African Rand to Pound Sterling (ZAR/GBP) exchange rate has been trending lower. If the blackouts continue, sentiment in the nation may keep declining and could lead to further losses for the emerging-market currency.
With no other data expected from either nation in the rest of Friday’s trading, the GBP/ZAR exchange rate is likely to fluctuate as a result of any global developments.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate is currently trending in the region of 17.6040. The South African Rand to Pound Sterling (ZAR/GBP) exchange rate is trading in the region of 0.0568.
Pound (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,Pound , 0.7875,
US Dollar,,Pound , 0.6413,
Canadian Dollar,,Pound, 0.5606,
Australian Dollar,,Pound, 0.5339,
New Zealand Dollar,,Pound, 0.4950,
[/table]
