Pound Rand Exchange Rate Outlook: GBP/ZAR at 1-week Low

February 3, 2015 - Written by David Woodsmith

STORY LINK Pound Rand Exchange Rate Outlook: GBP/ZAR at 1-week Low

The Pound weakened to its lowest level in a week against the South African Rand as market sentiment improved on hopes that a deal will be reached between Greece and its creditors.

With little in the way of economic data due for South Africa this week, the Rand’s exchange rate movements will be dominated by events in the geo-political spectrum. What data there was did however offer support the currency.

Pound to South ASfrican Rand Exchange Rate Today

According to data released in the previous session by Kagiso, manufacturing activity in South Africa increased more than forecast in January. The seasonally adjusted PMI rose to a reading of 54.2, up from the 50.2 recorded in December. In a PMI, any figure above 50 indicates expansion whereas a number below shows contraction in activity.

The new sales orders index also increased to 53.7 in January from 52.6 in the previous month, driven by both a slow improvement in domestic demand after a strike-ridden 2014 and recent data suggesting a supportive global environment. The report also showed that employment in the manufacturing sector eased slightly over the course of the month.

Rand to Dollar Exchange Rate at Best Conversion for 2 Weeks

As today’s session progressed, the Rand managed to trade at its best level in close to a fortnight against the US Dollar and its best showing for over a week against the Pound Sterling. Support came from increased portfolio flows and improved market sentiment.

‘With everyone else so content to cut their interest rates as much and as fast as possible in order to beat the competition over the line, the amount of investment into our domestic equity and bond markets is quite astounding,’ said Warrick Butler, a trader at Standard Bank.

Market sentiment improved after New Greek Finance Minister Yanis Varoufakis said that Greece would drop its demands for a debt write off. The minister proposed debt swaps instead which would help reduce the risk of losses on privately held bonds. The European Commission also agreed that the much-disliked Troika, which is made up of the European Union, the European Central Bank and International Monetary Fund, should be scrapped as it was seen as undemocratic.

The South African Rand is likely to experience movement later in the week because of upcoming US economic data and news from the Eurozone. Against the Pound, the Rand is likely to remain supported, as Sterling will likely soften because of the Bank of England’s interest rate decision, which is due later in the week.

Rand Exchange Rates Today

The Pound to South African Rand exchange rate is -0.28 pct lower with a conversion rate of 1 GBP equals 17.23932 ZAR.
The Euro to South African Rand conversion rate is +0.04 pct higher at 13.04982 EUR/ZAR.
The US Dollar to South African Rand conversion rate is -1.1 pct lower at 11.37755 USD/ZAR.
The Australian Dollar to South African Rand exchange rate converts -1.38 per cent lower at 1 AUD is 8.84747 ZAR.
The New Zealand Dollar to South African Rand conversion rate is -0.51 pct lower at 8.35749 NZD/ZAR.

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