- The Pound has dived overall so far today – This has stemmed from heavy ‘Leave’ support in the Referendum
- UK car registration data also cause for concern – Warnings of cooling interest
- South African Rand steady after Zuma speech – Controversial leader unveils economy plans
- UK production stats out on Wednesday – ZA GDP data also due in middle of week
The Pound has been and seems set to remain an incredibly risky option for investors today, owing to reactions to the latest EU Referendum polls.
The South African Rand, on the other hand, has been making comparatively better progress, thanks to recent comments from President Jacob Zuma.
UK Economic News: ‘Leave’ Vote ahead in the Polls, Pound Down on Investor Concerns
Sterling has been a poor prospect for investors today, owing to the most recent sets of polling stats for the EU Referendum raising the apparent chances of an ‘Out’ vote considerably.
In data sourced from YouGov and the Telegraph, both polls put the ‘Leave’ campaign in a majority position, with a number of other polls either showing similar results or putting the two campaigns on a level pegging.
The latest damage done to the Pound has resulted in widespread losses, including -0.4% against the Euro (GBP/EUR), -0.6% against the South African Rand (EUR/ZAR) and -1.3% against the Israeli New Shekel (GBP/ILS).
Offering some foresight for the Pound’s movement, Oanda Senior Market Analyst Craig Erlam said:
‘…if ‘Vote Leave’ continues to push ahead, the Pound may find itself back towards April’s lows before too long’.
Also focused on the EU Referendum were economists who were responding to the annual new car registrations, which fell by -3% on the year in May. Speculators postulated that this drop-off could be a symptom of widespread ‘Brexit’ concerns.
South African Rand Appreciates as President Zuma Lays Out Economic Turnaround Scheme
The Rand has been on rare positive form of late, with gains stemming from the latest Presidential address, as well as last week’s dodged ratings cut by agencies.
In the former case, the President has outlined plans to restore the lustre of the currently flagging economy, through a ‘nine-point plan’.
As part of his plan to bring more money into the country, Zuma identified that the services sector, specifically tourism, could serve to benefit the nation considerably in the future if it was properly invested in.
The other supportive occurrence for the Rand actually took place last week, when against widespread concerns that the national credit rating would be cut to junk status, it was ultimately left unchanged.
Future GBP, ZAR Forecast: Wednesday to bring UK Production Data and ZA Growth Rate Stats
The first major data of the week to affect both the Pound and the Rand will come on Wednesday, when both the UK and South African will release their first high-impact ecostats of the week.
In the UK’s case, movement may be caused by the mixed-forecast April industrial and manufacturing production results, while for South Africa, Wednesday will bring with it the Q1 GDP growth rate, which has been forecast to dip on both the quarter and the year.
Current GBP, ZAR Exchange Rates
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate was trending in the region of 21.6870 and the South African Rand to Pound Sterling (ZAR/GBP) exchange rate was trending in the region of 0.0461 today.
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