Pound to ZAR Exchange Rate Rallies as South African Retail Sales Slow

Pound to South African Rand exchange rate chart

The Pound to Rand (GBP/ZAR) exchange rate advanced today as investors flocked to the British asset and lacklustre South African data limited the latter currency’s appeal.

While the Rand began the day in a stronger position against peers like the US Dollar, it went on to soften and lost ground against Sterling over the course of European trading.

As the local session kicked off the Rand stabilised in response to the news that China’s economic growth slowed by less-than-anticipated in the first quarter of the year, a factor which lent support to commodity-driven assets.

The Rand edged slightly higher against the ‘Greenback’ and technical strategist Judy Padayachee stated; ‘Dollar/Rand posted a seven day high, to keep is looking for a break above 10.69, the high from earlier this month. However, the breakout might only occur next week as the risks are for a lacklustre move into the holiday weekend.’

However, as the day progressed UK developments helped the Pound advance on the Rand.

Data revealed that the UK unemployment rate dropped to 6.9 per cent – below the Bank of England’s 7 per cent threshold and the lowest level for several years.

In the aftermath of the data publication the Pound steadily strengthened against the majority of its currency counterparts.

Meanwhile, South African data showed that domestic retail sales growth slowed in February, with sales climbing by 2.2 per cent year-on-year, down from an annual increase of 6.4 per cent the previous month.

An annual sales increase of 3.5 per cent had been expected by economists.

In the three months to February sales were 3.6 per cent higher than they had been in the same period of the previous year, but month-on-month sales dipped by 0.2 per cent.

Shortly after North American trading opened the US Dollar came under pressure as domestic building permits, housing starts and manufacturing production data disappointing expectations. The Rand was therefore able to consolidate its previous modest gains.

With the four-day Easter weekend fast approaching additional Rand movement may be limited, although US reports (like tomorrow’s initial jobless claims data) will be of interest.