Pound to Rand Exchange Rate Today: GBP/ZAR Falls on Production Data

December 9, 2014 - Written by Tim Boyer

STORY LINK Pound to Rand Exchange Rate Today: GBP/ZAR Falls on Production Data

Currency News UK Presents Our Pound Sterling (currency:GBP) to South African Rand (currency:ZAR)

The Pound weakened against the South African Rand due to the publication of worse than forecast manufacturing and industrial production data out of the UK and as a report released in South Africa showed that nations manufacturing sector is continuing to see a recovery.

Data released by the London based Office for National Statistics (ONS) showed that the UK’s manufacturing sector continued to struggle with weak overseas demand and the strong Pound Sterling. The report showed that UK manufacturing production fell by 0.7% in October and industrial production fell by -0.1%. Economists had been forecasting for manufacturing to improve by 0.6% and industrial production to improve by 0.2%.

‘Manufacturing weakness is a reminder that we can’t be complacent about robust economic growth.’ said Chris Williamson, senior economist at Markit.

The report does not look as bad if looked at on a yearly basis as manufacturing production improved by 1.7% and industrial production rose by 1.1%. Economists had expected the yearly figures to be 1.8% and 3.2% respectively.

‘The fall in oil prices from around $115 per barrel in June to around $65 at present should provide a timely fillip to growth. With consumer and business confidence remaining strong, a recovery in real wages finally underway and survey measures of firms investment intentions at historically high levels, domestic demand should be strong enough to ensure that the sector’s recovery doesn’t go into reverse, despite mounting external obstacles,’ said Paul Hollingsworth from Capital Economics.

Pound to Rand Exchange Rate Forecast

Sterling is likely to weaken further against the Rand and other peers as upcoming Balance of Trade data is expected to disappoint due to lower export demand from the Eurozone, the UK’s largest trading partner.

Earlier in the session, the Rand was weakened by the release of worse than expected mining production data. The currency then found support from separate data, which showed that manufacturing activity in South Africa continued to recover in October. According to data released by statistics South Africa, manufacturing production increased by 2.2% on a year on year basis, adding to the preceding months rise of 8.6%. The report suggests that the sector is stabilising after a wave of strike action at the start of the year.

‘The data indicates that activity in the sector is stabilising after a prolonged period of strike action earlier in the year. We consider the present growth rates a better indication of underlying production dynamics. The sector is likely to do better next year, although power outages and uncertainty regarding power provision would weigh on output,’ said Manisha Morar an economist from ETM Analytics.

Rand Rates Today

The Rand to Euro conversion rate is +0.2 pct higher at 0.07054 ZAR/EUR.
The Rand to Pound exchange rate is +0.61 pct higher with a conversion rate of 1 ZAR equals 0.05574 GBP.
The Rand to New Zealand Dollar exchange rate today is converting +0.27 per cent higher at 0.11360 ZAR/NZD.
The Rand to US Dollar exchange rate is +0.84 pct higher with a conversion rate of 1 ZAR equals 0.08743 USD.

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