The Pound Sterling to South African Rand (GBP/ZAR) exchange rate advanced by around 0.45% on Monday morning.
After domestic data produced a mixed-bag of results, the Pound was little changed versus its most traded currency rivals. A general appreciation is as a result of continued demand after Bank of England (BoE) Governor Mark Carney made hawkish assurances that interest rates will rise in the UK.
The South African Rand, meanwhile, softened versus many of its major peers as it tracks Euro declination. Additional losses can be attributed to a slightly poor domestic data result and ongoing economic pressures from black-outs amid persistent issues with the nation’s largest energy provider, Eskom.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate is currently trending in the region of 17.9670.
Pound Sterling (GBP) Exchange Rate Edges Higher on Carney Comments
On Friday Governor Mark Carney made assurances that inflation would recover in the UK and borrowing costs will increase, which has seen continued demand for the British asset. He also contrasted previous comments made by the BoE Chief Economist Andrew Haldane, who said that a benchmark rate cut was equally as likely as a rise in the current climate.
‘We’re still in a position where our message is… that the next move in interest rates is going to be up,’ Carney said during a panel discussion at a Bundesbank conference in Frankfurt.
British economic data produced varied results on Monday, although the data has had minimal impact with support for Carney’s comments micrifying any negative result.
Net Consumer Credit came in at 0.7 billion in February, missing the median market forecast of a rise from 0.8 to 0.9 billion. February’s Net Lending Securities on Dwellings improved upon the median market forecast of 1.6 billion, with the actual result reaching 1.7 billion. Mortgage Approvals also improved upon estimates of 61,500 with the actual result coming in at 61,800.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate has fallen to a low of 17.8300.
South African Rand (ZAR) Exchange Rate Dips on Euro Softness
With the situation in Greece throwing up more unknowns amid speculation that the nation’s reform program will be rejected, the single currency slumped versus most of its major peers. As a currency with a close correlation to the Euro, the South African Rand tracked the declination.
Additional losses can be attributed to ongoing concerns that Eskom, the South Africa’s leading energy provider, will not be able to improve services. The black-outs which have been ongoing for a number of months are said to be weighing heavily on economic growth. Minister of Public Enterprises Lynne Brown said that the cost to the South African economy is in the region of R90 billion a month.
Domestic data also printed below expectations, which compounded Rand depreciation. Private Sector Credit showed growth of 8.67% on the year in February, slightly below estimates of 8.7% growth.
Pound Sterling to South African Rand (GBP/ZAR) Exchange Rate Forecast to Hold Gains
With the single currency seemingly unlikely to make a significant recovery until more is known about Greece’s reform program and its viability, the Pound Sterling to South African Rand (GBP/ZAR) exchange rate is likely to hold gains for the remainder of Monday’s trade.
There is the possibility of GBP/ZAR changes if German inflation data, due on Monday afternoon, prints positively. The pairing is likely to see greater volatility on Tuesday with a stacked economic docket and South African Trade Balance data due for publication.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate reached a high of 17.9640 today.
