Further Gains Predicted for GBP ZAR exchange Rate

December 11, 2015 - Written by John Cameron

STORY LINK Further Gains Predicted for GBP ZAR exchange Rate

GBP to EUR Exchange Rate Gained after BoE Held Rates

The Bank of England (BoE) opted to maintain its headline interest rate at 0.50% yesterday and did not extend the £375bn which it has committed to its controversial Quantitative Easing up to this point.

However, the Old Lady of Threadneedle Street’s policy announcement still favoured Sterling on the day, sending the GBP EUR exchange rate Northwards to close to 1.3900 and the Pound Dollar exchange rate back up through the 1.5200 GBP USD level.

BoE Minutes Supported Demand for the Pound Yesterday

The driver for the Sterling improvement appeared to be the tone of the rhetoric contained in the BoE’s accompanying text.

The statement’s sign off held out some hope for Sterling-holders that when UK interest rates do increase and a ‘new normal’ is found, there is potential that it will be higher than some investors currently believe.

The minutes noted that, ‘all members agree that, given the likely persistence of the headwinds weighing on the economy, when Bank Rate does begin to rise, it is expected to do so more gradually and to a lower level than in recent cycles. This guidance is an expectation, not a promise. The actual path Bank Rate will follow over the next few years will depend on the economic circumstance.’

GBP to ZAR Exchange Rate Pushed above 23.0000 Yesterday

Meanwhile, the Pound Sterling soared against one currency during yesterday’s trading session – the Sterling South African Rand Exchange rate jumped through the 23.0000 threshold for the first time in modern history following fresh political turmoil in South Africa where President Jacob Zuma unceremoniously sacked his Finance Minister Nhlanhla Nene.

Zuma’s actions added to the impression that South Africa’s policymakers have little answer to the ongoing slump in global commodities which sent the price of iron ore down to a fresh multi-year low earlier this week. Analysts forecast that there could therefore be further near-term gains to come for the GBP ZAR exchange rate.

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