The Pound Sterling to South African Rand (GBP/ZAR) exchange rate has declined considerably today on account of an unpredicted rally by the Rand (ZAR) against its rivals.
GBP/ZAR Exchange Rate News: Poor Sterling Showing Compounded by BoE Timidity
The Pound Sterling (GBP) has fallen by -0.3% against the South African Rand (GBP/ZAR) today, something that comes in spite of Sterling hitting its best rate against the Rand (ZAR) in over 10 years of 21.4308 yesterday. Today has seen the Pound drop to 20.9850 in the pairing, although far better results have been seen against other currencies. These include rises of 0.3% against the Swiss Franc (GBP/CHF), 0.5% against the Norwegian Krone (GBP/NOK) and 0.6% against the Turkish Lira (GBP/TRY). As well as losing out to the Rand today, Sterling has dropped by -0.5% against the Israeli New Shekel (GBP/ILS) and by -0.6% against the Swedish Krona (GBP/SEK).
This smattering of success for Sterling has come in spite of the UK monthly and yearly Construction Output figures showing a pair of declines, by -1% and -0.7% respectively. The Bank of England’s (BoE) UK inflation estimate for the next 12 months was also little cause for GBP optimism, as the printing showed a 2% prediction by the BoE compared to 2.2% last year.
South African Rand Rebounds from Rock Bottom after Platinum Mines Return to ZA Ownership
The South African Rand’s (ZAR) current uptrend is irregular, to say the least. The Rand has no relevant economic data out today and has been recently hit by dives in the price of platinum and gold. It has performed so poorly, in fact, that it has lately hit its worst exchange rates in 10 years against the Pound Sterling (ZAR/GBP), the Euro (ZAR/EUR) and the US Dollar (ZAR/USD). However, this abysmal performance is also part of the reason that the Rand has bounced back today. Enrique Diaz-Alvarez, the Chief Risk Officer at Ebury Partners, yesterday identified the selloff as ‘completely excessive’, and added that ‘The currency, everything, is priced for the worst-case scenario’.
In more explicable events, the purchase of three platinum mines from Anglo American by South African company Sibanye Gold has returned vital South African sites back into the nation’s hands, which can be considered at least a contributory factor towards the Rand’s surprising strength today.
GBP/ZAR Exchange Rate Forecast: Stability may make the Rand Worse Off when Normality Resumes
Neither the UK nor South Africa have any further relevant data releases due today, therefore next week will see the next major movements in the pairings. The first UK and South African results are on Tuesday, with the UK CPIs for August and the South African Q2 Current Account. The UK inflation rate is considered to be far more important than the South African data, so even a positive result for the Rand (ZAR) may be eclipsed by a potentially rising Pound (GBP) after the CPI percentages come in.
Current GBP, ZAR Exchange Rates
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate was trending in the region of 20.9740 and the South African Rand to Pound Sterling (ZAR/GBP) exchange rate was trending in the region of 0.0476 today.
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