Pound to Rand Exchange Rate Today - GBP ZAR Lower as Sterling Sees Losses on FX Markets

September 30, 2014 - Written by Toni Johnson

STORY LINK Pound to Rand Exchange Rate Today - GBP ZAR Lower as Sterling Sees Losses on FX Markets

The Pound to Rand exchange rate (GBP/ZAR) trended higher on Tuesday following the release of upbeat UK growth data and downbeat South African Trade Balance.

UK Gross Domestic Product (GDP) figures were revised higher on Tuesday by the Office of National Statistics (ONS) so the second quarter figure now stands at 0.9% growth rather than 0.8%.

Meanwhile the South African Balance of Trade has over doubled expectations of a -8.0B Rand deficit, instead rising to -16.3B Rand.

The latest Rand conversions are as follows:

The South African Rand to Australian Dollar exchange rate is trading down -0.51% at 0.10129 ZAR/AUD.
The South African Rand to Canadian Dollar exchange rate is trading up +0.26% at 0.09926 ZAR/CAD.
The South African Rand to Euro exchange rate is trading up +0.34% at 0.07014 ZAR/EUR.
The South African Rand to Pound exchange rate is trading up +0.05% at 0.05465 ZAR/GBP.
The South African Rand to New Zealand Dollar exchange rate is trading down -0.66% at 0.11361 ZAR/NZD.
The South African Rand to US Dollar exchange rate is trading down -0.16% at 0.08857 ZAR/USD.

South African Rand Exchange Rate Drops on Trade Deficit News

Tuesday’s South African Balance of Trade figure has seen the deficit widen far further than economists had forecast, swelling to the biggest gap seen in the last seven months. The widening has been catalysed by an increase on oil imports and a decrease in iron-ore exports. Economist Kamilla Kaplan commented: ‘Underlying export growth has been suppressed by relatively subdued consumption demand in Europe and a reduced demand for commodities from China.’ Moreover, with current political unrest between Hong Kong and China, economists fear that China’s growth may slow. Industry expert Dennis Chan commented: ‘If the situation deteriorates it would have a domino effect across the service sector in Hong Kong. From tour operators, restaurant owners to retailers, all of their businesses would be affected.’

One reason for August’s lack of South African exports is the closure of freight-rail company Transnet Holdings SOC’s iron-ore route for a 10 day period. Exports dipped by 9.6% while imports rose by 1.4%; however, figures can be particularly volatile with regards to fluctuations in commodities. Tuesday’s figures are likely to see the Rand soften, whilst ongoing political unrest in South Africa will also cause Rand volatility.

Pound Rate Boosted by Interest Rate Hike Prospects

The Pound has advanced versus other major peers on Tuesday following favourable GDP figures, increasing speculation that the UK will see interest rate increases in the near future. Forex strategist Jane Foley commented: ‘Sterling is supported by solid data, expectations of a rate increase, and market positioning that makes the currency less vulnerable to bad news. Revisions by the Office for National Statistics suggested the recession we had was not as bad as we initially thought. That’s positive for the Pound.’

In less positive news, the UK Nationwide House Prices report showed property values only increased by 0.1% in September, short of the 0.5% economists had forecast. Furthermore, UK Consumer Confidence numbers slipped in September to -1, a sharper drop than the decline to 0 expected. Tuesday’s figure has shown a drop from a formerly nine-year high as British consumers felt less confident in the future of the UK economy. Part of the morale drop is attributed to weak wage growth, an issue that has remained relatively persistent in the UK economic recovery.

South African Manufacturing PMI is scheduled for release on Wednesday, with present forecasts expecting the index to tumble from 49.0 to 46.92. Meanwhile, Wednesday will see Markit UK Manufacturing PMI published, followed by UK Construction PMI and South African Consumer Confidence figures on Thursday.

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