- Sterling maintains lead against Rand – Mixed results for UK’s daily data
- Claims drop comes with rising number of employed – Offset by poor wage growth
- Rand slumps after fisticuffs – Scuffle in parliament highlights chaotic situation
- UK retail sales data due out tomorrow – ZA interest rate decision also incoming
The Pound has soared against the South African Rand today, with a recent EU Referendum poll eclipsing the effect of the earlier mixed UK domestic data.
The Rand has conversely been faring poorly against a majority of its peers, due to the national parliament recently being rocked by violent outbursts from opponents of President Jacob Zuma.
UK Economic News: Latest ‘Brexit’ Polls Send Sterling Skyrocketing against Rivals
The Pound has made major gains against almost all of its competitors recently, thanks to an EU Referendum poll from Ipsos Mori that has identified 55% of the public as being in favour of an ‘In’ vote. For context, only 37% of respondents were hoping for a ‘Leave’ vote to be strongest.
Although the day’s biggest news was expected to be the earlier employment, earnings and claims data, the poll result has vastly outweighed any prior influence and set Sterling firmly on a positive track.
Regarding the earlier ecostats, UK claims fell in April and the number of employed in March rose by 44k, but weekly earnings excluding bonuses fell from 2.2% to 2.1%.
Among the Pound’s collection of major gains today have been advances of 0.8% against the Euro (GBP/EUR), 1% against the Australian Dollar (GBP/AUD), 1.4% against the Russian Ruble (GBP/RUB) and 1.8% against the South African Rand (GBP/ZAR).
South African Rand (ZAR) Dives across the Board on Continued Conflict amongst MPs
As with last week, the Rand has been moving in the opposite direction to the Pound today, having tanked against its usual peers due to intense domestic pressures that have significantly lowered the value of the national currency.
Most notable of these pressures has been the mounting levels of opposition to Zuma, who remains a deeply divisive figure in politics due to his alleged corruption and apparent financial mismanagement of the country.
The latest debacle surrounding the President has been the ejection from parliament of a number of opposition Economic Freedom Fighters (ECC), a rival party to Zuma’s African National Congress (ANC). ECC members resorted to violence when confronted by security guards; they had previously been talking over Zuma in an effort to prevent him delivering any speeches or messages.
While a relatively small development in the grand scheme of South African politics, the trading of blows in the halls of power has done little to make the Rand appealing for investors.
Future GBP, ZAR Forecast: UK to Contribute Sales Data, ZA Bringing Interest Rate Decision
The remainder of the week will see the announcement of both UK and South African economic announcements, although at the time of writing the UK’s contributions were expected to have a greater impact on the pairing’s ultimate exchange rate movement.
Coming first from the UK will be tomorrow morning’s retail sales results for April. In all fields, except the annual variant including automobile fuels, expectations have been for rises.
Later on in the day will be the announcement of the South African Reserve Bank (SARB) interest rate decision for May, which is currently expected to remain at 7%.
Closing off the week will be Friday morning’s UK Confederation of British Industry (CBI) trends for total orders and selling prices in May, which are expected to dip in the former category.
Current GBP, ZAR Exchange Rates
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate was trending in the region of 23.1610 and the South African Rand to Pound Sterling (ZAR/GBP) exchange rate was trending in the region of 0.0432 today.
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