Pound To Rand Exchange Rate: GfK Survey Sees GBP Rise To 22.89 ZAR

Published: 20 Oct 2017 21:24 Forex

Pound to rand exchange rate forecast

The Pound is seeking to extend gains against the Rand this week, but its movements have been muted due to the heightened appeal of emerging market currencies like the Rand (ZAR).

Ahead of the latest US data the Rand exchange rates (ZAR) returned to a weaker footing, with markets likely to reassess their pricing for a June Fed rate hike in the event of stronger figures.

The appeal of the Pound (GBP) somewhat recovered, meanwhile, on the back of an improved GfK Consumer Confidence Survey.

The GBP to ZAR exchange rate fell by a moderate amount on Thursday, despite the latest issues brought up against ZA President Jacob Zuma.

The GBP’s dip against the ZAR highlights just how little confidence investors have in it, relative to the latest damage to hit the President’s reputation. This has concerned the President’s commitment to austerity measures, given that he has spent over £350,000 on cars for his (legal) wives over the past 3 years.

Gold prices recovered from their lowest level since April on the back of increased demand for safe-haven assets, with the Rand exchange rates (ZAR) also benefitting from weakness in the US Dollar (USD).

Thursday morning consequently saw the Pound Sterling to South African Rand (GBP/ZAR) exchange rate enter a downtrend, driven lower by an unimpressive UK GDP report.

The British pound to rand exchange rate fluctuated heavily on Wednesday, briefly bottoming at 22.6668 before soaring upwards to around 23.0719.

At the time of writing, the pair was around 0.8% up in its second attempt at a Sterling rally this week.

GBP to ZAR exchange rate chart
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Latest Pound/Rand Exchange Rates

On Friday the Pound to British Pound exchange rate (GBP/GBP) converts at 1

The GBP to GBP exchange rate converts at 1 today.

FX markets see the pound vs euro exchange rate converting at 1.17.

The GBP to USD exchange rate converts at 1.261 today.

NB: the forex rates mentioned above, revised as of 29th Mar 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.

Pound (GBP) Exchange Rates Look to Solidify Gains Despite ‘Brexit’ Concerns

The Pound attempted to head back towards last week’s three-month-high on Tuesday and Wednesday as new polls revealed a strengthening lead for the EU referendum’s ‘Remain’ campaign.

An ORB poll released by The Telegraph saw 55% of those asked intending to vote ‘Remain’, with 42% intending to vote ‘Leave’. With the split widening in ‘Remain’s favour, The Telegraph cites stronger support from men, over-65s and Conservative supporters who had been swayed by Prime Minister David Cameron’s campaigning.

As many economists predict a period of uncertainty for the UK and the Pound in the event of a ‘Brexit’, this news saw Sterling bullish.

This is despite Tuesday data revealing that the UK Treasury had missed its public net borrowing targets. Net borrowing worsened from 6.1b to 6.6b, missing forecasts of 5.8b. PSNCR’s public finances report also saw figures plummet from 17.8b to -2.4b.

This data, alongside news that a YouGov ‘Brexit’ poll indicated an even split between ‘Remain’ and ‘Leave’ campaigns, weighed on the Pound on Wednesday morning and allowed the Rand to briefly push back.

South African Rand (ZAR): Briefly Strengthens on a Burst of Risk Movement

The South African Rand experienced a brief burst of sentiment on Wednesday morning, pushing GBP/ZAR down to 22.6668 due to a sudden shift in risk-on appetites.

Reuters reports;

‘South Africa's rand firmed to a one-week high against the dollar early on Wednesday on improved risk appetite, but analysts said the unit looked vulnerable to the possibility of a credit ratings downgrade and a U.S. Federal Reserve interest rate hike …The currency was trading at its strongest levels since May 17’

Emerging market currencies like the Rand have benefitted in the last week due to fluctuations in prices of commodities like oil, leaving these non-commodity correlated risky currencies favoured.

However, the Rand’s volatility increased due to an increasingly strong US Dollar as well as current political instability in South Africa, leaving the Rand’s gains temporary.

south african rand to pound sterling exchange rate chart

GBP/ZAR Forecast: Thursday GDP Could Halt Sterling Rally

The Rand has proven to be able to push down the Pound despite optimistic news for the EU referendum’s ‘Remain’ campaign, even if briefly.

That said, poor UK data could easily send Sterling plummeting against the risky Rand. Thursday’s session sees the release of vital British data including preliminary Q1 Gross Domestic Product (GDP), which is currently expected to hold at 0.4% quarter-on-quarter and 2.1% year-on-year.

Investors are likely to sell the Pound if GDP prints below expectations, as it would add to evidence that ‘Brexit’ fears have negatively affected the economy. It will be accompanied by BBA’s latest house loans report.

The Rand, on the other hand, could see movement in response to Thursday’s PPI reports, which are currently expected to improve month-on-month and worsen year-on-year.

Failing that, the Rand will certainly continue to be pressured ahead of the possibility of South Africa’s credit rating being downgraded to ‘junk’ in S&P’s June 3rd report.

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