Currency News

Daily Exchange Rate Forecasts & Currency News

Pound to Rand Exchange Rate Falls on IMF Two-Year UK Recession Warning

April 9, 2019 - Written by John Cameron

The Pound Sterling to South African Rand exchange rate fell this afternoon, and the pairing is currently trading at an inter-bank rate of R18.3521.

This afternoon the International Monetary Fund (IMF) said that a no-deal Brexit would risk a two-year UK recession.

In a downbeat half-yearly assessment of the global economy, the IMF predicts the UK economy could be 3.5% smaller than expected by 2021 if trade barriers were swiftly erected.

The report stresses that ‘a no-deal Brexit that severely disrupts supply chains and raises trade costs could potentially have large and long-lasting negative impacts on the economies of the United Kingdom and the European Union.’

This likely dampened sentiment in Sterling, while today’s weakness in the US Dollar led to an increase in risk appetite, which buoyed the South African Rand.

Pound Sterling (GBP) Exchange Rates Slide as PM Holds Last-Minute Brexit Talks

The Pound slipped as UK Prime Minister Theresa May held talks with German Chancellor Angela Merkel this afternoon during a working lunch.

The two leaders discussed the UK’s request to extend Article 50 to 30 June with the option to leave earlier if a deal is ratified.

Later today the Prime Minister is due to hold further last-minute talks with French President Emmanuel Macron.

Meanwhile reports suggested that the UK was likely to be offered a Brexit extension until 31 December 2019.

However, during the European Union press conference EU Chief Negotiator, Michel Barnier said the EU may not grant a long extension unless May proposes a new approach and is willing to embrace a customs union.

South African Rand (ZAR) Exchange Rates Rise despite Looming Electricity Supply Crisis

On Monday, Bloomberg reported that the current national electricity blackouts may seem trivial in comparison to an electricity-supply crisis that is hanging over South Africa.

The supplier of almost all of South Africa’s power, Eskom will lose more than 25% of its current generating capacity over the next ten years.

According to government estimates, replacing that output and adding the capacity to meet South Africa’s rising demand will cost more than one trillion Rand and take years.

Despite Eskom building two new plants, they are running years behind schedule and will not be enough to fill the supply gap as by 2023 a third of Eskom’s coal plants will be at the end of their lifespan.

Pound vs. South African Rand Outlook: Will the GBP/ZAR Exchange Rate Slide as UK GDP Stagnates?

On Wednesday, the South African Rand (ZAR) could slide against the Pound (GBP) following the release of South Africa’s Business Confidence Index.

If business confidence slides once again in March, it could dampen sentiment in the Rand.

However, the Pound could fall against the South African Rand following the release of the UK’s monthly GDP.

If February’s GDP has stalled in the run up to the end of March, the UK’s original date of departure from the EU, the Pound South African Rand (GBP/ZAR) exchange rate could slide.

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