Pound Sterling to Rand Exchange Rate Advances to 5-day High

January 27, 2015 - Written by David Woodsmith

STORY LINK Pound Sterling to Rand Exchange Rate Advances to 5-day High

Today's Pound Sterling Outlook vs the SA Rand

The Pound advanced against the South African Rand despite UK fourth quarter Gross Domestic Product (GDP) data coming in below economist forecasts. The Rand fell sharply as domestic data and an escalation in power cuts raised concerns over the economy.

Sterling softened against many of its most traded peers after data released by the London based Office for National Statistics showed that the pace of Britain’s economic growth slowed in the fourth quarter of 2014, but overall on an annual basis the UK economy expanded at its fastest pace since 2007.

Growth in the fourth quarter slowed to 0.5% from the 0.7% recorded in the third quarter and the pace of growth was slower than the 0.6% growth forecast by many economists. On a year on year basis however, the UK economy expanded from the 1.7% recorded in 2013 to 2.6%, keeping the UK on course to be the world’s fastest growing advanced economy.

The data will be a boon for the Conservative party ahead of this year’s general election but it will also provide some ammunition for its opponents who are sure to play on the slowdown recorded in the final quarter of last year.

‘The recovery is on track and our plan is protecting Britain from the economic storm, now is not the time to abandon that plan and return Britain to economic chaos,’ said Chancellor George Osborne following the release of the data. After the report was released, the Pound softened against the Euro and US Dollar.

The South African Rand meanwhile weakened sharply against most of its major peers after South Africa’s leading business economic indicator fell by 0.1% on a year on year basis in November 2014. The decline added to the previous month’s sharp drop of 1.2%. The largest positive contribution in November resulted from an increase in the average number of hours worked in the manufacturing sector. The major negative contribution to the composite leading indicator came from another fall in the export commodity price index, as well as a deceleration in the number of new passenger vehicles sold.

The Rand is forecast to remain under pressure against the Pound as concerns over South Africa’s power grid continue to rise. The nation’s largest utility provider Eskom announced that it has begun stage two power cuts as 25% of its generator capacity was out of action due to technical issues. The blackouts will have a negative impact upon the country’s economy.

Rand Exchange Rates

The Pound to Rand conversion rate is +1.79 pct higher at 17.59789 GBP/ZAR.
The Euro to Rand exchange rate converts +2.23 per cent higher at 1 EUR is 13.17914 ZAR.
The US Dollar to Rand exchange rate is +1.05 pct higher with a conversion rate of 1 USD equals 11.58000 ZAR.
The Swiss Franc to Rand conversion rate is +1.01 pct higher at 12.84091 CHF/ZAR.
The Canadian Dollar to South African Rand exchange rate is +1.75 pct higher with a conversion rate of 1 CAD equals 9.34342 ZAR.
The Australian Dollar to South African Rand exchange rate converts +1.24 per cent higher at 1 AUD is 9.19145 ZAR.

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TAGS: Currency Predictions Daily Currency Updates Poun Forecasts