The Pound Sterling to South African Rand (GBP/ZAR) exchange rate has risen today; this comes after the Rand briefly rallied following news from the Chinese stock market.
Pound Sterling to South African Rand (GBP/ZAR) Exchange Rate News: Reduced Chinese Gold Demand Damages Performance
The Pound Sterling rose against the South African Rand (GBP/ZAR) today by 0.4%; this comes at a time when the Pound also saw significant gains of over 0.5% against the Australian Dollar (GBP/AUD), the New Zealand Dollar (GBP/NZD), the Thai Bhat (GBP/THB) and the Turkish Lira (GBP/TRY). This rise is due to the UK June Net Consumer Credit and Mortgage Approval data coming through today; both results were positive and exceeded forecasts.
Meanwhile, the South African Rand has declined since yesterday, when news that the Chinese government would be stepping in to stabilise the chaotic Chinese stock market sent the Rand and the ‘Aussie’ on an uptrend against their competitors. This reversal comes after today’s estimates that Chinese gold importing may fall by as much as 40% this year; both South Africa and Australia have heavily developed gold mining industries and rely on Chinese demand to raise the price of their exports.
South African Rand to Pound Sterling (ZAR/GBP) Exchange Rate May Reverse if FOMC Indicate Interest Rates May Remain on Hold
As a commodity currency, the value of the South African Rand (ZAR) is tied to the performance of the US Dollar (USD). Most global commodities are priced in USD, so an improving ‘Greenback’ means a subsequent decline for commodity prices. The Federal Open Market Committee is due to meet today to discuss the US interest rate; if the policy statement following the gathering implies that the FOMC is looking to leave the US interest rate on hold until the end of the year, then it will instead benefit the Rand and other commodity currencies.
South Africa has benefitted from positive employment news today, as the Q2 Unemployment Rate has dropped from 26.4% to 25%. However, this positive development is unlikely to have a major impact on the Rand’s performance as the country still has the 16th highest unemployment rate in the world, coming in three places lower than the 13th country on the list, Greece.
Pound Sterling to South African Rand Exchange Rate Forecast: GBP/ZAR Likely to continue Uptrend
For the near future, at least, it seems unlikely that the South African Rand (ZAR) will reverse its decline against the Pound Sterling (GBP), as the Pound has continued to rise today after the positive UK data releases.
However, the June South African Producer Price Index (PPI) is due for release tomorrow and forecasts are optimistic for the year-on-year (YoY) results, with speculators predicting a 4.32% increase over last year’s 3.6%. Should this result exceed expectations, it is possible that the Rand will bounce back against the Pound, although the drop in Chinese gold imports is a crushing loss for the South African economy and may continue to hamper the Rand’s overall performance.
Current GBP, ZAR Exchange Rates
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate was trending in the region of 13.3462 and the South African Rand to Pound Sterling (ZAR/GBP) exchange rate was trending in the region of 0.0509 today.
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