UPDATE
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate advanced by around 0.5% in the early stages of Thursday’s European session.
As traders await British Retail Sales data, the Pound is generally trending statically versus its major rivals. The South African Rand, meanwhile, softened versus its major peers ahead of the Federal Open Market Committee (FOMC) interest rate decision. The Rand’s depreciation can be linked to mounting uncertainty as to which way the FOMC will decide to go. If the Fed opt to hike the rate, the Rand is likely to dive amid dampened demand for risk-correlated currencies.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate is currently trending in the region of 20.6800.
Yesterday…
GBP/ZAR Conversion Rate Predicted to Hold Gains after UK Labour Data Showed Rising Wages and Falling Unemployment
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate advanced by around 0.5% on Wednesday morning.
British economic data produced mostly positive results on Wednesday which caused the Pound to advance versus most of its major peers. July’s Average Weekly Earnings strengthened to 2.9%; eclipsing the median market forecast 2.5% wage growth. August’s Claimant Count Rate equalled expectations of 2.3%. July’s Employment Change came in at 42,000; bettering the median market projection of 18,000. August’s Jobless Claims Change saw an unwanted increase of 1,200. However, July’s Weekly Earnings ex Bonus equalled the market consensus of 2.9%.
‘With inflation around zero for most of this year, UK households are enjoying the first period of sustained real wage growth since the financial crisis. Adjusted for price changes, wages grew 2.9% in the latest three months, the strongest since 2002. Total pay was bolstered by bonuses which grew 17% in July and 3.8% in the three months through July. The ONS said this was due to higher bonuses in financial and business services. Excluding bonuses, pay growth in the private sector quickened to 3.4% in the three month period,’ stated Emma Charlton writing for Bloomberg.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate is currently trending in the region of 20.7330.
ZAR/GBP Exchange Rate Forecast to Decline on Fed Rate Hike Bets
With mounting speculation that the Federal Reserve will look to hike the cash rate on Thursday, demand for emerging-market assets has softened. The South African Rand declined amid speculation that a Fed rate hike will see a long period of risk-averse trade. Additional Rand losses can be attributed to fears surrounding China’s economic difficulties and the fallout for emerging-market assets. Although government intervention saw the Shanghai Composite Index end the session up from opening levels, many analysts are concerned that Beijing’s intervention is not having the desired permanent impact.
Later on Wednesday South Africa’s Retail Sales data for July will be published. The results may not be significantly impactful, however, given that trader focus is being dominated by Thursday’s Federal Reserve interest rate decision. If the Fed opt to hold the cash rate, the Rand is likely to appreciate along with its emerging-market counterparts.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate dropped to a low of 20.5840 during Wednesday’s European session.
Pound Sterling to South African Rand Forecast to Hold Gains Irrespective of SA Retail Sales Data Today
Given that the Pound strengthened amid speculation that the latest UK jobs data will pressure the Bank of England (BoE) into hiking the benchmark interest rate, and with the Rand struggling amid hopes for a Federal Reserve cash rate increase tomorrow, South Africa’s Retail Sales data may not be particularly impactful. Thursday could see heightened GBP/ZAR volatility, however, despite a complete absence of South African economic data. The Fed rate decision is likely to have a profound influence on the currency market as a whole. Also, British Retail Sales data could provoke volatility for the pairing.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate climbed to a high of 20.7430 during Wednesday’s European session.
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