As Tuesday began the Pound had the advantage in the GBP/ZAR pairing.
Sterling was enjoying a more bullish relationship with several of its major rivals thanks to Bank of England Governor Mark Carney’s recent hawkish comments regarding the central bank’s commitment to safeguarding the UK’s economic recovery.
The Pound was also supported by the expectation that tomorrow’s UK growth report will show reasonable fourth-quarter expansion.
The Rand meanwhile was feeling the pressure as the price of commodities like crude oil and iron ore fell and political upheaval in Turkey caused investors to lose heart with emerging-market assets.
With the situation in the Ukraine far from resolved and Egypt appearing equally unstable, the news that Turkish opposition leaders are pushing for the resignation of Prime Minister Recep Tayyip Erdogan added to the risk-off environment.
The Rand consequently trimmed its recent gain against the US Dollar by 0.3 per cent and edged lower against rivals like the Pound.
As industry expert John Cairns noted; ‘An overnight eruption of renewed political problems in Turkey is set to spoil what is otherwise an excellent Rand environment.’
However, the Rand went on to stage an impressive rebound following the release of growth data for South Africa.
Economists had forecast that the South African economy would expand by 3.4 per cent in the fourth quarter, quarter-on-quarter, following expansion of 0.7 per cent in the previous three months.
But the nation’s economy actually grew by 3.8 per cent on a quarterly basis, resulting in annual growth of 2.0 per cent – slightly higher than the 1.8 per cent year-on-year expansion predicted by economists.
The acceleration comes as the nation’s mining and manufacturing sectors returned to work following several strikes.
The Rand advanced on its peers following the data publication, although gains were slightly restrained ahead of tomorrow and the presentation of South Africa’s budget by the nation’s Finance Minister Pravin Gordhan.
The Pound was also boosted by the news that UK BBA loans for house purchase increased by more-than-forecast in January.
This impressive result will give the Reserve Bank of South Africa more leeway when it comes to raising interest rates.
South African Rand (ZAR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,South African Rand,18.0640,
Euro,,South African Rand,14.8915,
US Dollar,,South African Rand,10.8349,
Australian Dollar,,South African Rand,9.7796,
New Zealand Dollar,,South African Rand,9.0341,
Canadian Dollar,,South African Rand,9.7965,
[/table]
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