Pound Sterling to South African Rand (GBP/ZAR) Exchange Rate Forecast to Hold Decline after SA Inflation Data

Modified: Wednesday, 17 June 2015 13:24 BST - Written by Admin

STORY LINK Pound Sterling to South African Rand (GBP/ZAR) Exchange Rate Forecast to Hold Decline after SA Inflation Data

Pound Sterling to South African Rand (GBP/ZAR) Exchange Rate Gains 0.7%

The GBP to ZAR exchange rate rallied by around 0.7% on Wednesday following the release of South Africa's latest inflation data. The report showed a much steeper slowing in consumer price gains in May and could have an impact on the fiscal policy pursued by the South African Reserve Bank in the months ahead. South African Retail Sales data is still to be published so we can expect additional Pound to Rand movement as the day continues.

Earlier...

GBP to ZAR Exchange Rate Holds Steady Despite UK Inflation Increase

The Pound Sterling to South African Rand (GBP/ZAR) exchange rate is expected to hold below 19.50 during Tuesday’s European session.

After British Consumer Prices showed inflation moved away from negative territory in May, the Pound strengthened versus most of its major peers. The appreciation has been somewhat sluggish, however, after the core inflation measure failed to grow in line with estimates. Additionally, many analysts speculate that UK inflation will remain low for some time which is good for consumers, but not so much for investors.

The South African Rand, meanwhile, advanced versus many of its currency rivals after Eskom, the nation’s leading energy provider, stated that it would not be load shedding on Tuesday. A break from the long period of rolling blackouts will be some comfort to traders, although the struggling company warned that load shedding may resume if consumers are not cautious with their energy usage during peak hours.

The Pound Sterling to South African Rand (GBP/ZAR) exchange rate is currently trending in the region of 19.3810.

Pound Sterling (GBP) Exchange Rate Forecast to Edge Higher against the Rand (ZAR) after Dip into Deflation Proves Temporary

British economic data produced mixed results on Tuesday, but the Pound strengthened after deflation proved temporary. This will undoubtedly see improved sentiment towards the Bank of England (BoE) after Governor Mark Carney made several reassurances that deflation was indeed temporary and not of concern. May’s Consumer Price Index came in at 0.1% on the year in line with economists’ consensus. The Core Consumer Price Index, however, missed May’s estimate of 1.0%, with the actual result reaching 0.9%.

Sterling gains have been somewhat sluggish, however, amid speculation that inflation will remain low for a long period of time. This would be unattractive for investors looking for high returns, and would weigh on monetary policy decisions.

‘Deflation lasted for just one month but the big picture is that inflation is likely to remain extremely low throughout the rest of 2015,’ said Samuel Tombs, an economist at Capital Economics Ltd. in London. ‘The UK’s weak inflation outlook is likely to ensure that the MPC keeps interest rates at their record-low level for another year or so.’

The Pound Sterling to South African Rand (GBP/ZAR) exchange rate dropped to a low of 19.2840 today.

South African Rand (ZAR) Exchange Rate Forecast to Soften against the British Asset as we Approach Peak Time for Energy Usage

The South African Rand edged higher versus most of its currency competitors on Tuesday after Eskom announced it would not be load shedding on Tuesday morning. This was due to the fact that they had adequate generating capacity to meet demand. However, the website did include a warning for those using energy during the peak period. ‘However, the power system is expected to be constrained during the evening peak period (5pm – 9pm) mainly as a result of increased electricity demand,’ the power utility said. Eskom also appealed to energy users to consider efficient ways of keeping warm during cold weather conditions.

The Rand appreciation has been somewhat slowed, however, after tracking single currency losses. Geopolitical tensions in Greece and US Dollar strength has dampened market sentiment; causing cooling demand for emerging market currencies such as the South African Rand.

Currency Forecast Now: Pound Sterling to South African Rand (GBP/ZAR) Exchange Rate Forecast to Fluctuate ahead of UK Labour Market Data, South African Inflation

Wednesday will be quite significant for those invested in the Pound Sterling to South African Rand (GBP/ZAR) exchange rate. For those invested in the Rand, South African inflation data will be of interest. In terms of British data, there will be several labour market publications with the potential to provoke volatility.

The Pound Sterling to South African Rand (GBP/ZAR) exchange rate climbed to a high of 19.4630 today.

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TAGS: Pound Rand Forecasts Pound Sterling Forecasts South African Rand Forecasts