The Pound Sterling to South African Rand (GBP/ZAR) exchange rate jumped by +0.69% in the early hours of European trading as the South African Rand remained softer after last week’s Swiss National Bank (SNB) bombshell.
The emerging-market currency has been tracking the flailing Euro after the SNB announced it had cut the Euro to Swiss Franc (EUR/CHF) tie that had been in place since 2011.
One economist stated: ‘The local unit is being driven by foreign factors at present, buckling beneath pressure from stronger ‘Greenback’ and in wake of Swiss National Bank’s decision to abandon its currency cap to Euro.’
European Central Bank (ECB) Meeting Ahead – Euro to South African Rand (EUR/ZAR) Exchange Rate Climbs
The strong trade relationship between South Africa and the Eurozone saw the Rand weaken against other currency majors on the news. However, this Thursday will see the European Central Bank (ECB) announce its latest decision regarding monetary policy, and speculation surrounding the situation is rife.
Initially it was thought the central bank would undertake aggressive monetary policy procedures—a factor which saw the Euro fall. However, this week the Single Currency has reclaimed some losses against other majors as economists forecast disappointment.
Foreign exchange expert Yunosuke Ikeda stated: ‘Even if the ECB decides to introduce quantitative easing, a lack of details could send the Euro back to levels before the Swiss move last week. The Euro could surge to $1.20 if the ECB only keeps repeating itself.’
However, it appears as if the European Central Bank is running out of time after the Eurozone entered disinflation last week. The Euro to South African Rand (EUR/ZAR) exchange rate rocketed on Monday, trending in the region of 13.4675.
Pound Sterling to South African Rand (GBP/ZAR) Exchange Rate Forecast
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate could feel the effects of South African Mining Production figures on Tuesday, which are expected to rise on the year from -1.1% to -0.5%.
Wednesday’s South African Core Inflation Rate is forecast to expand slightly from 5.80% to 5.81% in December. However, Wednesday will be a big day for Pound Sterling trading with the release of UK Unemployment Rate and Change in Employment figures.
The UK unemployment rate is expected to decrease from 6.0% to 5.9% in the three months through November, while Employment Change is forecast to rise by 74K.
Any positive UK ecostats could see the Pound Sterling to South African Rand (GBP/ZAR) exchange rate rally. Meanwhile, in the run-up to Thursday’s ECB meeting, the Rand could remain soft against other currency majors.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate is trending in the region of 17.5760.
