Pound to Rand Today: GBP/ZAR Exchange Rate Higher Even as Deficit Shrinks

December 31, 2014 - Written by Toni Johnson

STORY LINK Pound to Rand Today: GBP/ZAR Exchange Rate Higher Even as Deficit Shrinks

Today's Pound Sterling to Rand Exchange Rate Outlook

Although South Africa’s trade balance report showed a much sharper-than-expected contraction in the nation’s deficit, the Rand failed to enjoy an upswing in the hours following the report's release.

The Pound to Rand exchange rate advanced by 0.2% over the course of the European session and held on to gains during rather muted trading.

The GBP/ZAR hit a high of 18.0890 after falling to a low of 17.9750 earlier in the day.

Latest Rand Exchange Rates

The Pound to South African Rand exchange rate is +0.07 pct higher with a conversion rate of 1 GBP equals 18.02079 ZAR.
The Euro to South African Rand exchange rate today is converting -0.26 per cent lower at 14.03340 EUR/ZAR.
The US Dollar to South African Rand exchange rate converts -0.17 per cent lower at 1 USD is 11.54913 ZAR.
The Swiss Franc to South African Rand exchange rate is -0.26 pct lower with a conversion rate of 1 CHF equals 11.67168 ZAR.
The Canadian Dollar to South African Rand conversion rate is +0.08 pct higher at 9.97743 CAD/ZAR.
The Hong Kong Dollar to South African Rand exchange rate is -0.17 pct lower with a conversion rate of 1 HKD equals 1.48896 ZAR.

The trade figures revealed a 5.3% (4.74 billion Rand) decline in exports and an 18.7% (20.67 billion Rand) drop in imports. While the export of precious metals and stones rose, exports of mineral products, machinery/electronics and transport equipment all fell.

Industry expert Robert Lang said of the trade figures; ‘The South African Revenue Service reported the trade deficit fell to 5.7 billion Rand in November from a revised 21.6 billion Rand in October. It was more than 1 billion Rand smaller than predicted in a poll of economists by Reuters, who had forecast a deficit of about 7 billion Rand. The revision to the October trade deficit figure was very small, as it was previously reported at 21.3 billion Rand. A large deficit is bad news for South Africa’s current account, as a growing deficit on the current account puts pressure on the Rand.’

The Rand continued trading in a weaker position against the Pound after the stats were published and the currency was also struggling against the US Dollar. While the USD/ZAR pairing did ease from an earlier high of 11.6545, it settled to trading in the region of 11.6045 – up from the day’s low of 11.5954. A strong US consumer confidence figure could result in additional Rand declines before the close of the North American session.

Before markets close for the New Year break, further Rand movement could be occasioned by South Africa’s Private Sector Credit data. The year-on-year figure is expected to register at 9.03% in November following October’s 9.06% number. Of course, GBP/ZAR volatility could also be caused by UK news before the weekend. The main reports to be aware of are Net Consumer Credit, Mortgage Approvals and Markit UK Manufacturing PMI.

Over the rest of January, the South African reports to focus on include Manufacturing Production (due out on the 12th), KAGISO Manufacturing PMI and Retail Sales Stats (set for release on the 14th), Mining Production figures (out on the 20th) and South Africa’s inflation report (published on the 21st). If South African fundamentals disappoint it will exert further downward pressure on the Rand.

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