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Pound South African Rand (GBP/ZAR) Exchange Rate Steadies as UK Mortgage Approvals Fall

January 30, 2019 - Written by John Cameron

GBP/ZAR Exchange Rate Rangebound as May to Return to Brussels after Brexit Vote

The Pound South African Rand (GBP/ZAR) is rangebound today and is currently trading at RA17.7970 on the inter-bank market.

Sterling (GBP) steadied against the South African Rand (ZAR) today after last night’s parliamentary vote on Prime Minister Theresa May’s Brexit withdrawal agreement, which saw the ‘Brady’ amendment passed by a majority in the House of Commons, effectively breaking the Brexit deadlock.

Pound traders are, however, remaining cautious as the EU has previously ruled out renegotiations particularly on the issue of the Irish backstop.

Theresa May now has to return to Brussels to secure the new deal between the UK and the EU.

Nathalie Loiseau, the French Europe minister, commented:
'We are ready to talk about the future but now is the time to agree on the conditions of the separation.

'The withdrawal agreement that is on the table is the best possible agreement. Let us not reopen it.'

Today saw the publication of the UK mortgage approvals figures for December which decreased against last month to 63.793K, although this exceeded expectations.

South African Rand Euro (ZAR/EUR) Exchange Rate Flat as Chinese Economy ‘Entering Slowdown’

ZAR sentiment was also hit today after the publication of the South African Reserve Bank’s private sector credit growth figures for December, which decreased to 5.10%.

The South African Rand has failed to gain on the Euro today, even though the US has begun trade talks with China, despite ongoing tensions between the two nations over recent statements regarding the prosecution of Chinese tech giant Huawei’s Chief Financial Officer.

Jacob Kierkegaard, a Senior Fellow at the Peterson Institute for International Economics commented:
‘It’s clear that the tariffs are beginning to hit home in China and that’s having significant ripple effects… China’s been the global growth locomotive or many years… If they’re entering a slowdown, that’s a really big deal.’

ZAR has continued to suffer from risk-aversion with China being one of South Africa’s biggest trading partners.

GBP/ZAR Forecast: Poor South African PPI Figures could see Sterling Rise

GBP investors will be looking ahead to see how Theresa May handles her renegotiations with the EU in the coming weeks.

Any signs that the EU will reject May’s deal is likely to see the Pound fall against the South African Rand.

Tomorrow, meanwhile, will see the publication of UK Gfk consumer confidence figures for January which are expected to decrease.

ZAR traders will also be awaiting the publication of South Africa’s PPI figures for December tomorrow which are expected to fall, potentially seeing the GBP/ZAR exchange rate benefit.

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