Although the Pound broadly softened prior to the Bank of England’s rate decision, the British currency continued to trade strongly against a pressurised Rand. The Rand was also slightly softer against the US Dollar as investors weigh up yesterday’s Federal Open Market Committee statement and look ahead to US employment and manufacturing data.
At the current exchange rate 1 Pound will purchase 15.0042 South African Rand as of 10:45 GMT
News that the US economy expanded by more than expected in the second quarter put the Rand on the back-foot yesterday, and the currency proved unable to benefit from a report showing that South Africa’s trade deficit narrowed by more than forecast in June.
Rand declines were tempered however as the FOMC adopted a dovish stance and China released some better-than-expected manufacturing figures.
According to Absa Capital analysts: ‘This morning’s encouraging Chinese manufacturing data should curb extended rand weakness today, but a strong non-farm payrolls print tomorrow afternoon could ensure that the Rand weakens to double digit-territory against the Dollar before the end of the week.’
The GBP/ZAR exchange rate hit a low of 14.8308 Rand per Pound
Economists have forecast that tomorrow’s US data will show that the world’s largest economy added 185,000 jobs in July, with the unemployment rate falling to 7.5 per cent.
As improvements to the US employment sector are essential if the Federal Reserve is to taper stimulus in the months ahead, a better that expected result could see the US Dollar strengthen and the Rand decline.
As the European session progresses GBP/ZAR fluctuations could occur in response to the Bank of England’s policy meeting and rate decision.
Tomorrow’s UK housing data and construction PMI will also be of interest to the pairing.
South African data to watch out for next week includes foreign exchange reserve figures (due out on the 7th) and a domestic manufacturing production report (scheduled for publication on the 8th).
Current South African (ZAR) Exchange Rates:
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.8870 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 15.0042 >
The Euro/South African Rand Exchange Rate is currently in the region of: 13.0934 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 8.8433 >
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 7.8667 >
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.5507 >
(Correct as of 10:45 GMT)
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