The GBP/ZAR exchange rate fell by more than 0.2% during the European session as the Pound declined across the board in response to concerning UK inflation data.
The Pound to South African Rand exchange rate hit a low of 17.6420 after British consumer price inflation was shown to have fallen even further below the Bank of England’s 2% target, easing from 1.5% to 1.2% year-on-year.
With the pace of inflation now at its lowest for five-years, the BoE is likely to refrain from increasing interest rates in the short term.
As stated be economist Martin Beck; ‘There is little sign of any inflationary pressures on the horizon. The chances of the MPC voting for an increase in interest rates this year have fallen to practically zero. Unless inflation begins to pick up soon, it is likely that the first hike will be pushed out towards the middle of next year, if not later.’
The US Dollar to Rand (USD/ZAR) exchange rate was trending in a fairly narrow range on Tuesday after the Rand advanced at the beginning of the week following the publication of China’s upbeat trade report.
Emerging-market currencies like the Rand also began the week trending higher against the US Dollar as global growth concerns triggered revisions in Federal Reserve interest rate bets.
The only US report scheduled for release today, the nation’s NFIB Small Business Optimism figure, is unlikely to have much of an impact on the GBP/ZAR exchange rate.
South African data is lacking until tomorrow, when the nation will publish retail sales figures for August.
In the opinion of NKC Research; ‘The local unit […] will likely be in limbo until tomorrow when retail sales and a deluge of US data releases should reinvigorate trading activity.’
A month-on-month sales gain of 0.6% has been forecast for August. This would follow sales growth of 1.2% in July.
On the year, retail sales are expected to be up 2.2%.
The US reports liable to cause USD/ZAR fluctuations include MBA Mortgage Applications figures, Advance Retail Sales, and Empire Manufacturing.
The Pound Sterling to South African Rand exchange rate hit a low of 17.6420
Pound to South African Rand (GBP/ZAR) Exchange Rate Forecast
While South Africa’s retail sales report is likely to have an influence on GBP/ZAR trading tomorrow, investors will also be taking a keen interest in the UK’s employment data.
The report is expected to show that the UK added 30,000 positions in the three months to August, taking the Unemployment Rate from 6.2% to 6.1%.
However, even if the level of joblessness declines as expected, the Pound could soften if UK Average Weekly Earnings continue to trail inflation.
It has been predicted that average weekly earnings climbed by 0.7% in the three months to August, year-on-year – slightly more than the 0.6% increase recorded in the three months to July.
South African Rand (ZAR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,South African Rand,17.7005,
Euro,,South African Rand,14.0491,
US Dollar,,South African Rand,11.0846,
Australian Dollar,,South African Rand,9.6855,
New Zealand Dollar,,South African Rand,8.6650,
Canadian Dollar,,South African Rand,9.9250,
[/table]
