July 24, 2019 - Written by John Cameron
STORY LINK Pound South African Rand (GBP/ZAR) Exchange Rate Improves as South African Inflation Dips
GBP/ZAR Exchange Rate Edges Higher as SA Economic Growth Forecast is Slashed by IMF
The Pound South African Rand (GBP/ZAR) edged higher today, leaving the paring trading around R17.386.
The South African Rand (ZAR) failed to make any gains on the Pound (GBP) despite encouraging year-on-year South African Consumer Price Index data for June.
Figures rose above the forecast 4.4%, instead improving at 4.5%.
Month-on-month figures also beat forecasts, rising by 0.4%.
Elize Kruger, an Economist at NKC African Economics, said:
‘Today’s inflation numbers don’t change much, but we believe there is scope for another cut this year. The bank left the door open last week by saying their decisions would be data-dependent.’
South Africa’s economic prospects have been slashed by the International Monetary Fund, with it now expecting the economy to expand by just 0.7% – half of what was estimated in January.
GBP/ZAR Exchange Rate Increases as Boris Johnson Remains in Spotlight
The Pound, meanwhile, has performed relatively well against many of its competitors this morning as markets continue to absorb the news that Boris Johnson is now the Prime Minister of the United Kingdom.
Brexit is remaining in focus for many Sterling traders, however, as Boris Johnson is a known Brexiter who had previously promised that the UK would leave the EU on 31 October – deal or no-deal.
Michel Barnier, the European Commission’s Chief Brexit Negotiator, also said today:
‘Is it an orderly Brexit? … Is it a no-deal Brexit? The no-deal Brexit will never be the choice of the EU, but we are prepared and for an orderly Brexit. We will work along the next few weeks or months with the new UK government in the best possible way, in the very constructive spirit to facilitate the ratification of the withdrawal agreement.’
Today saw the publication of the UK BBA mortgage approvals figures for June, which rose to 442.653K.
‘Consumer demand has generally been robust since Britain voted to leave the European Union in June 2016, but the housing market has slowed, especially in London and surrounding areas.’
GBP/ZAR Forecast: Could Sterling Fall on a Brexiter Johnson Cabinet?
South African Rand traders will be looking ahead to tomorrow’s PPI figures for June. These, however, are expected to ease slightly, and may prove a drag on the ZAR/EUR exchange rate.
Brexit and Boris Johnson are likely to remain in focus for the rest of this week.
Any further indications of a hard Brexit coming from Mr Johnson could heightened no-deal Brexit fears, and would further weigh on Sterling.
The GBP/ZAR exchange rate will likely fluctuate this week as UK markets pay close attention to Boris Johnson’s new cabinet.
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TAGS: Pound Rand Forecasts South African Rand Forecasts