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GBP ZAR Exchange Rate Falls as Brexit Bill Expected to Pass Through Parliament

January 31, 2017 - Written by Ben Hughes

The British Pound to South African Rand exchange rate continued to test the day’s best levels throughout most of Wednesday afternoon.

As South African’s own manufacturing PMI from Barclays had unexpectedly risen above the 50 contraction point for the first time in a while, the Pound’s gains against the Rand were limited.

[Previously updated 01/02/2017]

Although the South African manufacturing sector unexpectedly returned to a state of expansion in January, with the PMI rising from 46.7 to 50.9, the Rand was unable to hold onto its earlier gains against the Pound.

While UK manufacturing input prices were found to have risen at their fastest pace since the survey began this did not diminish confidence in the Pound, with investors instead encouraged by the high level of output growth.

[Previously updated 31/01/2017]

The GBP ZAR exchange rate depreciated today as analysts expect the UK government’s Brexit bill to pass through parliament without any major hiccups.

Pound South African Rand (GBP ZAR) Pressured Article 50 Bill



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The Pound South African Rand (GBP ZAR) exchange rate slid earlier this morning as investors reacted negatively to reports suggesting that the UK government’s Article 50 bill will pass through parliament without amendments.

Conservative rebels who had planned to block the bill are apparently backing away from supporting any amendments to the bill after the band was reportedly satisfied by Prime Minister Theresa May’s promise of a white paper outlining her plans for Brexit. Conservative minister and Remain campaigner Nicky Morgan added;

‘Whatever we think, more people voted to leave and I think it is right that the government should honour that, that the Article 50 process should be triggered - and that MPs like me should respect and accept that result and support the Bill.’

Without the support of the Tory backbenchers Labour and Liberal Democrat MPs now have little chance of raising enough cross-party votes to push for amendments, which had included a full vote on Brexit at the end of the two-years of negotiations that are expected to start in March.

The bill is scheduled to enter parliament on Tuesday for two days of debate, with a vote expected late on Wednesday.

South African Rand Advance Hampered by Cabinet Reshuffle Rumours



The South African Rand’s gains against the Pound have been muted somewhat today following market speculation that President Jacob Zuma might be moving to reshuffle his cabinet.

Investors believe that the move is likely to remove the much respected Pravin Gordhan from his post as finance minister, after a very public falling out between the two them, with Gordhan previously being charged with fraud charges that he declared were ‘politically motivated’.

The possibility of a reshuffle caused traders to sour slightly on the Rand as it creates further uncertainty over the political landscape in South Africa as Zuma attempts to cling to power, despite numerous allegations of corruption and rising calls for him to step down by the end of the year.

GBP ZAR Exchange Rate Forecast: UK House Price Data Ahead



The GBP ZAR exchange rate may slide even further tomorrow following the release of Nationwide’s UK Housing Price data as it is expected to report that prices fell from 4.5% to 4.4% in January.

This will likely be exacerbated by the UK’s Manufacturing PMI as it is forecast to have dropped from 56.1 to 55.9 over the same period.

Meanwhile a possible rise in South Africa’s own manufacturing PMI could see the Rand climb even higher against the Pound in trading tomorrow.

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