Pound to South African Rand (GBP/ZAR) Exchange Rate Firmer on strong US Data

December 23, 2014 - Written by Toni Johnson

STORY LINK Pound to South African Rand (GBP/ZAR) Exchange Rate Firmer on strong US Data

Latest Pound to Rand Exchange Rate Forecast

The Pound advanced against the South African Rand as the African currency was weakened by the release of strong economic data out of the USA. Sterling’s gains were restrained however, as the UK currency; itself was weakened by disappointing Gross Domestic Product (GDP) and current account data.

Due to Christmas rapidly approaching activity on the markets was fairly muted but movements did occur as those traders not on their holidays waited for the release of a number of GDP reports and in particular US data.

The South African Rand to Australian Dollar exchange rate converts -0.11 per cent lower at 1 ZAR is 0.10628 AUD.
The South African Rand to Canadian Dollar exchange rate today is converting -0.64 per cent lower at 0.09995 ZAR/CAD.
The South African Rand to Swiss Franc exchange rate today is converting -0.08 per cent lower at 0.08498 ZAR/CHF.
The South African Rand to Euro conversion rate is -0.03 pct lower at 0.07066 ZAR/EUR.
The South African Rand to Pound Sterling exchange rate today is converting at 0.05546 ZAR/GBP.

Rand to Pound Exchange Rate Today

Earlier in the session, the Rand was trading steadily against the Pound and briefly inched higher following the publication of data out of the UK that showed that annual economic growth was revised lower from 3% to 2.6% in the third quarter.
In addition, putting pressure on the Pound was data showing that the nation’s current account deficit widened to £27 billion in the third quarter from £24.3 billion in the second quarter, whose figure was revised from a previously estimated deficit of £23.1 billion. Analysts had expected the current account deficit to narrow to £21.9 billion in the last quarter. The rise represents 6% of UK GDP.

‘While the quarterly results remain strong, the stark revision in annual growth confirms that the pace of recovery is slowing. The most concerning aspect of these figures is that the current deficit has risen to an unsustainably high level – due to the fall in net investment. Although the economy continues to grow, the recovery is not yet secure and further efforts are needed to boost business investment and to help businesses export to foreign markets,’ said David Kern, chief economist at the British Chambers of Commerce.

The Rand then went onto the retreat as data was released in the USA. According to the Washington based Commerce Department the world’s largest economy expanded at its quickest pace in 11 years in the third quarter of 2014. Following the data’s release emerging market currencies softened.

The South African Rand is also under pressure from concerns over the nation’s power supply and expectations that the US Federal Reserve will hike interest rates early in 2015. The outlook for the currency remains bleak.

‘Deteriorating sentiment towards emerging markets through the course of 2014 has culminated in net outflows in portfolio investments amounting to some 10.9 billion Rand, the first time since 2008 that South Africa has experienced outflows. Continued outflows could serve as a catalyst for the currency depreciative trend to extend,’ said ETM Analytics.

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