Pound to Rand Exchange Rate Today: GBP/ZAR Softens Thanks to Carney Comments

November 25, 2014 - Written by Tim Boyer

STORY LINK Pound to Rand Exchange Rate Today: GBP/ZAR Softens Thanks to Carney Comments

The Pound Sterling to Rand exchange rate weakened after Bank of England Governor Mark Carney and three other members of the bank’s Monetary Policy Committee reaffirmed their warning over low inflation.

Earlier in the session the Pound to rand exchange rate held on to gains as Gross Domestic Product (GDP) data out of Africa’s most advanced economy failed to inspire any strength in the African currency.

Here are the latest forex rates today:

The Pound to Rand exchange rate converts -0.5 per cent lower at 1 GBP is 17.20988 ZAR.
The Euro to Rand exchange rate today is converting -0.24 per cent lower at 13.66679 EUR/ZAR.
The US Dollar to Rand exchange rate converts -0.57 per cent lower at 1 USD is 10.95592 ZAR.
The Swiss Franc to Rand exchange rate converts -0.25 per cent lower at 1 CHF is 11.36400 ZAR.
The Canadian Dollar to Rand conversion rate is -0.27 pct lower at 9.73340 CAD/ZAR.

According to Statistics South Africa, GDP in South Africa grew by an annualised rate of 1.4% on a quarter on quarter basis in the third quarter of 2014, up from a revised figure of 0.5% recorded in the second quarter of the year.

Despite the improvement the data did nothing to inspire Rand strength as economists had been forecasting for the GDP report to show that the South African economy expanded at a rate of 1.5% on a quarter on quarter basis and by 1.3% on an annual basis.

"There were no major surprises even though GDP was slightly lower than the markets consensus. We all knew we had a good agricultural season. There was a slight improvement in mining but this was off a low base. Finance also ticked up. Manufacturing was expected to be negative but we saw an encouraging return in consumer spending,’ said Nicky Weimar, senior economist at Nedbank.

Weak economic growth is just one of a number of concerns over the South African economy. Worries over the nations struggling power supplies and high unemployment continue to be a drag. Falling commodity prices are another factor weighing on the economy and Rand.
Sterling softened against most of its major peers after the BoE representatives told a parliamentary committee that the UK’s consumer price index is likely to continue to fall further away from their target inflation rate of 2% and could slide below 1% before staging a recovery.

The Pound was weakened as Mark Carney assured the panel that interest rates will rise but added that for now the status quo will remain and the bank offer no further hints as to when interest rates will rise.

The policy makers also said that the UK economy remains vulnerable to external factors, in particular a slowing global economy and the weakness of the Japanese and Eurozone economies. The biggest concern was over the Eurozone as inflation remains dangerously low and economic growth looks set to be pitifully weak over the next year.

Worries over the Eurozone were further heightened after the Organisation for Economic Co-operation and Development said that insufficient policy stimulus in the region is undermining growth and raises the risks of deflation in the region. The group also warned that Japan would grow less than previously forecast over the next two years.

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