Pound to Rand Exchange Rate Today - GBP to ZAR Higher as Investors Support Sterling

August 26, 2014 - Written by Ben Hughes

STORY LINK Pound to Rand Exchange Rate Today - GBP to ZAR Higher as Investors Support Sterling

The Pound to Rand exchange rate (GBP/ZAR) advanced on Thursday as Sterling found buying support over the Scottish indepenence situation and how the British currency will be affected.

The GBP/ZAR found itself trading down earlier in the week as South Africa dodged recession in the second quarter, after Gross Domestic Product (GDP) figures showed an expansion of 0.6%.

Furthermore the UK has seen poor data releases of late, holding back any additional speculation as to the timing of interest rate hikes.

The latest forex levels show:

- The Rand to Australian Dollar exchange rate is trading down -0.34% at 0.10060 ZAR/AUD.
- The Rand to Canadian Dollar exchange rate is trading down -0.26% at 0.10214 ZAR/CAD.
- The Rand to Euro exchange rate is trading down -0.07% at 0.07138 ZAR/EUR.
- The Rand to Pound Sterling exchange rate is trading down -0.21% at 0.05673 ZAR/GBP.
- The Rand to New Zealand Dollar exchange rate is trading down -0.32% at 0.11227 ZAR/NZD.
- The Rand to Dollar exchange rate is trading down -0.14% at 0.09410 ZAR/USD.

Today has seen further disappointment with the publication of weaker than expected BBA Loans for Home Purchase figures, which have highlighted the effects of tighter policies enforced for applicant lenders.

South African Economy Escapes Recession; Rand Exchange Rate Gains

The Rand has seen a prolonged period of volatility in the latter year with the South African economy speculated to be on the verge of recession following strike action which has dominated the majority of 2014. Tuesday’s Retail Sales forecast was set to attain 0.9% in the second quarter; however, despite a drop from the predication, gaining only 0.6%, a positive figure is highly favourable in comparison to a contraction in the first quarter with statistics published at -0.6%. Barclays stated: ‘The continued unwinding of the credit cycle, slow job growth, and rising inflation have undermined consumption spending growth.’

With speculation rife that South Africa may fall victim to a recession after suffering such extensive strike action this year. Analyst Peter Attard Montalto commented: ‘There is more bad news to come. We should remember the level of growth is exceptionally low and totally insufficient to solve South Africa’s deep developmental and jobs problems.’

Pound Trades Following WPP Reporting Losses From Strong Exchange Rate

Conversely the Pound is trading lower in the currency market, dipping to its weakest exchange rate versus the US Dollar (USD) in the latter five months. However, prior to this Sterling has been trending at a remarkably strong level, causing UK businesses to forecast large scale losses despite a high sales volume. The largest advertising company in the world, WPP, today suggested that in the first half of the year, they’ve seen losses of up to £460 million because of the strength of the Pound. They stated that this year: ‘looks likely to be another demanding year, as a strong United Kingdom Pound and weak faster-growth-market currencies continue to take their toll on our reported results.’

UK data showed a disappointing drop in the amount of approved home loans since a tightening of policy in April took place. BBA Home Loans for House Purchase statistics fell short of economists’ forecasts at 42,792 in July. Predictions had expected the data to reach 44,065 more than June’s 43,180. In the latter half of the week South Africa is due to release Producer Price Index (PPI) figures on Thursday whilst Friday will see the revelation of the South African Balance of Trade. Thursday’s PPI is expected to reach 0.3% month-on-month, whilst the South African Trade Balance is forecast to fall to -3.2 billion Rand. Sterling on the other hand will see its greatest factors of volatility on Friday by way of the release of UK Consumer Confidence figures and Nationwide House PX.

The Pound is also volatile to the debates surrounding the UK, with the speculation that a vote for Scottish Independence could cause a massive impact on Sterling. The current debate surrounding the situation finds politicians debating about the feasibility of Scotland retaining the Pound following a yes vote away from the UK, with some suggesting Scotland joining the Eurozone as an alternative option.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Currency Predictions Daily Currency Updates Poun Forecasts