The past five days haven’t been favourable for the Pound Sterling/South African Rand currency pair, but recent news could see sentiment shift.
During the last week the GBP/ZAR exchange rate has fluctuated between 20.9229 and 21.5194.
UK Currency Firms as House of Commons Reopens
On Monday the Pound was able to rally against its economic peers, excluding the Rand, as UK political developments improved Sterling’s appeal. GBP gained as the House of Commons Easter recess ended and Parliament was able to consider three pressing domestic issues – the uncertain state of the national steel industry, the repercussions of the ‘Panama Papers’ leak and the pro-EU leaflet produced by the government, which has apparently cost the taxpayer £9m.
Taxes were the primary focus of debate yesterday afternoon, with the PM subject to lengthy questing over the history of his tax activity and his plans for combatting offshore accounts and tax havens.
One positive development to emerge from the debate was the announcement that most UK overseas territories would be sharing their financial details with HMRC to aid transparency.
Pound Sterling Stable after CPI Report
The biggest news of the day has been the announcement of the UK inflation results for March, which have exceeded forecasts on both the month and the year.
While the Pound advanced strongly on the news, economists have been uncertain over what the outcome means for the Bank of England (BoE). The BoE’s interest rate decision is due this week, but forecasts earlier in the year were for a UK interest rate hike to be off the table until after the UK Referendum.
Now, however, some industry experts are anticipating that a 2016 rate hike could be on the cards if a ‘Brexit’ outcome fails to materialise.
South African Rand Gains Despite Confidence Dip
The Rand has been on an uptrend today despite disappointing South African data.
The only domestic news to speak of has been the Q1 consumer confidence result, which ‘improved’ from -14 to -9. While a figure closer to the positive range had been forecast, the fact that optimism marginally improved may have been enough to boost the troubled South African currency.
Elsewhere, the appeal of the Rand may have been raised somewhat by the rising price of nationally important precious metals, such as gold, platinum and copper.
GBP/ZAR Exchange Rate Forecast
In the days ahead Pound Sterling/South African Rand exchange rate movement may occur as a result of tomorrow’s South African retail sales results. Thursday’s BoE interest rate decision and South African mining production stats are also likely to generate movement.
If the South African reports show the modest improvements expected, the Rand could edge up against the Pound.
Heads Up
Summary of major upcoming data releases that we think may move the market.