Pound to Rand Exchange Rate News - GBP/ZAR Slumps as Chinese Data Supports Commodities

September 23, 2014 - Written by David Woodsmith

STORY LINK Pound to Rand Exchange Rate News - GBP/ZAR Slumps as Chinese Data Supports Commodities

The British Pound to Rand exchange rate (GBP/ZAR) lowered ahead of Thursday’s key statements from Governor of the Bank of England Mark Carney.

Conversely, the Rand (ZAR) has strengthened against the Euro (EUR), US Dollar (USD) and other majors with the support of favourable Chinese manufacturing data.

The latest conversion rates are as follows:

The Rand to Australian Dollar exchange rate is trading up +0.43% at 0.10124 ZAR/AUD.
The Rand to Canadian Dollar exchange rate is trading up +0.35% at 0.09915 ZAR/CAD.
The Rand to Euro exchange rate is trading up +0.03% at 0.06966 ZAR/EUR.
The Rand to Pound Sterling exchange rate is trading down -0.09% at 0.05462 ZAR/GBP.
The Rand to New Zealand Dollar exchange rate is trading up +0.72% at 0.11111 ZAR/NZD.
The Rand to US Dollar exchange rate is trading up +0.04% at 0.08952 ZAR/USD.

South African Rand Higher After Chinese Data

The Rand has traded higher against major peers on Tuesday as China’s latest manufacturing figures supported the South African currency. As China is South Africa’s largest trading partner, Rand strength can benefit from positive advancements in the Chinese economy. The HSBC Purchasing Managers Index jumped to 50.5 in September, higher than the 50.0 forecast and above Augusts’ 50.2. Any figure above 50 denotes expansion while below 50 shows contraction.

China has produced unfavourable figures in recent weeks, lending support to the speculation that Chinese economic expansion is slowing. Forex expert Annette Beacher commented: ‘After the dismal industrial production print for August, financial markets were increasingly of the view that China is slowing at a more rapid pace than desired, so today’s print provides a welcome offset.’

Another Rand-positive event was South African Ports and Rail company Transnet’s announcement that it will continue with its massive multi billion Rand investment program. This news comes in light of the revelation that the South African economy is expected to expand at its slowest rate since 2009 this year. Transnet spokesperson Brian Molefe commented: ‘It is below our assumptions of growth. We are not perturbed by it.’ Molefe continued: ‘The investments that we are making are for the long term. They are investments that are required to be made during this kind of cycle.’

South Africa has been subject to seven months of strikes in 2014 in both the mining and metalworking sectors and this has severely hindered economic growth. Last week the South African Reserve Bank made the decision to hold interest rates at their current level in an attempt to support the economy.

British Pound Strength Waning Following Poor Mortgage Data

The Pound has been stabilising in the aftermath of the Scottish referendum, which took place last week. The Pound saw major fluctuations in the run-up to the vote as investors considered the prospect of Scotland leaving the UK. Tuesday has seen bank loans for mortgages sink to a 12-month low at 41,588 lending support to speculation that the UK housing market is cooling. April saw the introduction of the Mortgage Market Review, which has affected bank’s allocations to applicants, as well as affecting applicant eligibility. The British Bankers Association (BBA), who undertakes the survey, commented: ‘Housing market activity appears to be moderating. Though approval processes were temporarily disrupted by the implementation of the Mortgage Market Review in early 2014, recent figures suggest a stable overall picture of approval numbers.’

In a quiet week by way of domestic data publications, the Pound is likely to witness its most influential day on Thursday when Mark Carney speaks in Wales. If Governor Carney is able to deliver statements with a hawkish tone, Sterling could rally higher against other majors. Meanwhile, Thursday will also be influential for Rand strength with the release of South African Purchasing Managers Index figures.

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