Forecasts: Pound, Euro, Rand Exchange Rate Predictions & Latest GBP EUR & ZAR Conversion Rates

September 22, 2014 - Written by John Cameron

STORY LINK Forecasts: Pound, Euro, Rand Exchange Rate Predictions & Latest GBP EUR & ZAR Conversion Rates

Exchange Rate Forecasts Today: The Sterling is forecast to gain against the South African Rand (ZAR) but analysts had predicted that Pound to Euro exchange rate may fall over concerns regarding the future make-up of the UK constitution.

The post ‘No to Scottish Independence’ relief rally which some analysts had mooted did not materialise for the Pound Sterling (currency:GBP) during Friday trading. In a clear case of investors placing the cart before the horse, the Pound ended the week at a lower level against the euro (currency:EUR) than it had been on Thursday afternoon.

Price action confirms that the ‘No’ vote to a break away from the 307-year old Union with Westminster was almost totally factored-in by the time the polls closed.

However, what was not priced-in was the UK Prime Minister’s comments on Friday morning. Premier David Cameron injected a large short of uncertainty into what was up until then an apparently clear-cut situation when he addressed the British people at breakfast time on the final session of the week, telling them that the effect of the Scotland referendum campaign would not be a break up of the UK but would instead be increased devolution of each of its four constituent countries.

The prospect of a fast-tracking of such a move caused investors to shift out of Sterling-denominated assets, sending the Pound euro exchange rate down to a weekly close in the 1.2600s; the pair had briefly touched 1.2800 GBP EUR in a bout of irrational exuberance during the early hours of Friday morning.

Elsewhere, the South African Reserve Bank announced during the final 48hrs of last week’s trading session that it would be maintaining its key lending rate at its current level of 5.75%.

However, it was comments from SARB Governor Gill Marcus which stole the headlines – the central bank Chief announced that she would be quitting the top job at the SARB in November.

Although Marcus didn’t put forward a reason, she has been vocal in her criticism of the Pretoria Government in recent months and stated that, ‘the anemic state of the domestic economy, rising unemployment and the downside risk to the growth forecast,’ had proved a disappointment to her.

These words, and the fact that the SARB failed to tighten monetary policy, are forecast to send the Pound Sterling Rand exchange rate GBP ZAR higher in the short term.

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