Pound to Rand Exchange Rate (GBP/ZAR) Outlook Deteriorates

Modified: Friday, 21 June 2013 08:53 BST - Written by John Cameron

STORY LINK Pound to Rand Exchange Rate (GBP/ZAR) Outlook Deteriorates

Global stocks tumbled and the high-yielders took a pounding during yesterday’s session in the currency markets as investors priced-in Wednesday night’s comments from Federal Reserve Chairman Ben Bernanke. The FTSE 100 gave up very close to 2.98% of its value on the session, whilst Frankfurt’s Dax index closed down by 3.28% on the day, signalling a pronounced flight to quality from investors.

There were big moves for almost all of the world’s major currencies. The Pound to US Dollar exchange rate (currency : GBP USD) was trading into the 1.5700s before Bernanke’s announcement that Quantitative Easing’s days were numbered, but had retraced down into the low 1.5400s by late yesterday. Meanwhile, Sterling recorded sizeable gains against the commodity-driven risk-sensitive currencies, sending the Pound to Australian Dollar (currency : GBP AUD) and Pound to New Zealand Dollar (currency : GBP NZD) exchange rates through the psychologically significant 1,6800 and two to one thresholds respectively.

One high yielder which didn’t lose as much ground as might have been anticipated given the prevailing market conditions was the South African Rand. The Pound to South African Rand exchange rate (currency : GBP ZAR) traded up to as high as 15.9563 during the European session before dropping back into the 15.8000s as the North American session drew to a close. The Rand’s losses were limited by a positive domestic data set published just before the Federal Reserve’s FOMC policy announcement on Wednesday. The Q1 data showed that the nation’s current account deficit had contracted to stand at only 5.8% of South Africa’s annual GDP. The improvement in the import/export numbers was attributed to increased revenues for the nation’s exporters – a signal that the SA economy may be in the process of turning a corner.

With little in the way of tier one data releases today, risk sentiment is once again likely to shape price action in the markets. Another day of losses for the world’s equities markets will bring similar results to yesterday.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: American Dollar Forecasts Australian Dollar Forecasts Daily Currency Forecasts