Currency News

Daily Exchange Rate Forecasts & Currency News

Rising Gold Prices Support ZAR, Pound South African Rand Exchange Rate Dips

January 17, 2017 - Written by Minesh Chaudhari

The Pound to South African Rand exchange rate trended near its worst daily levels on Wednesday afternoon but remained well above the week’s opening levels.

The South African Rand failed to capitalise on the weaker Pound throughout the day due to limited demand for risky emerging market currencies ahead of Donald Trump’s upcoming inauguration on Friday.

[Previously Updated 17/01/2017]

Pound Rand Losses Recorded Ahead of Fateful Speech on UK’s Brexit Future



The Pound has been soft against the South African Rand today, dropping to 16.41 in the pairing due to concerns about an imminent Brexit speech by the Prime Minister.

Recent UK data has actually been positive, with UK inflation in December rising notably on the month and the year.

Even this positivity has had a sting in the tale, however, as concerns remain that rising inflation without rising wages will increase the strain on the lowest-earning families.

Theresa May’s Brexit Speech could Smash Pound Sterling Demand Shortly



Advertisement
The next UK news to watch out for is the much-anticipated Brexit speech from Theresa May, which has been broadly tipped to show that Hard Brexit is on the table instead of one of the softer alternatives.

This announcement is expected to trigger a much greater loss in the Pound Rand exchange rate, as well as long-lasting uncertainty about how the UK will cope outside of the EU single market.

While highly improbable, if May still considers staying in the single market as a possibility, the Pound may yet rise due to a last lifeline with the EU remaining in place, at least for the short-term.

South African Rand Hold's Firm against Sterling on Gold Prices, Weakness in the US



The Rand has been able to climb against the Pound today thanks to a recent rise in gold prices.

Although recent South African gold production figures showed a fall in November, the fact that a nationally important commodity is more valuable than at this point last year has still raised the appeal of the Rand.

Also helping out the Rand has been the latest bout of weakness for the US Dollar, which has dropped off over mass profit-taking by USD investors.

In wider news, South African Finance Minister Pravin Gordhan is attending the World Economic Forum (WEF) in Davos this week and is expected to show that South Africa is still a viable player on the world economic stage.

South African Rand Losses may be Imminent on Inflation and Retail Figures



The next South African news to watch out for, outside of any statements by Gordhan at the WEF event, will come on Wednesday morning.

This will initially consist of the core and base inflation rate stats for December, followed by retail sales results for November.

At the time of writing, inflation was expected to fall on the year and the month for the base results, but reprint at 5.7% for the annual core figure. Retail sales are set to worsen from -0.2% to -0.4% annually.

Like this piece? Please share with your friends and colleagues:

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: Pound Rand Forecasts

Comments are currrently disabled