Pound to South African Rand exchange rate in a tight range

January 13, 2015 - Written by David Woodsmith

STORY LINK Pound to South African Rand exchange rate in a tight range

The Pound to Rand exchange rate was trading in a tight range as UK inflation data weighed upon the British currency and export data supported the African currency.

Pound to Rand Exchange Rate Today

The Pound Sterling fell sharply against most of its major peers after data released by the London based Office for National Statistics (ONS) showed that inflation in the UK fell sharply to 0.5% in the last month of 2014 from the preceding month’s figure of 1%. The figure was also the lowest seen in 14 years and matched the record low seen in May 2000. Bank of England Governor Mark Carney and other maker economists are now forecasting that inflation is likely to fall again next month as the sharp decline in oil prices shows no sign of ending anytime soon.

‘A little bit of inflation is good for the economy. We have the means at the Bank of England and the will and responsibility... to bring inflation back up to the 2% target level,’ said BoE governor Mark Carney.
The Office for National Statistics said falling petrol prices, lower electricity, and gas bills compared with a year ago were the biggest factors pushing down inflation in December. Food prices, which have been pushed down by a supermarket price war and lower commodity prices, fell by 1.9% to make their biggest fall since June 2002.

As the session progressed however, the Pounds losses were restrained as economists suggested that the UK economy is strong enough to resist the dangers posed by weak inflation. Consumer spending in the nation remains strong and wages are expected to begin to rise, allowing it to stop it following the Eurozone into deflation territory.

Rand to US Dollar Exchange Rate Today

The South African Rand meanwhile was slightly higher against the US Dollar as falling global oil prices helped the currency fend off some of the negativity created by the previous sessions negative manufacturing data.

Also lending some support to the Rand was the release of domestic data, which showed that South Africa’s bulk export volumes increased by 2.6% in 2014 to a record 156 million tonnes.

The report shows that exports remained strong despite strikes and a perceived slowdown in the wider global economy.

The majority of bulk exports go to Asia as China, India, Japan and South Korea require South African coal and iron ore to feed their steel mills and thermal coal power stations. The report bodes well for fourth quarter gross domestic product data, which will be published later on February 24th.

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