The Pound Sterling to South African Rand (GBP/ZAR) exchange rate advanced modestly on Friday as the Pound received some slight support from the week’s first positive UK data.
The US Dollar to South African Rand (USD/ZAR) exchange rate was holding steady after posting declines in response to the slightly disappointing US initial jobless claims figures.
According to currency strategist Oliver Alwar; ‘If the Rand can get a weekly close below the 10.5000 level, a more pronounced move lower could develop. There are still developments in Ukraine and the Middle-East to watch out for as focus shifts to next week’s Jackson Hole [meeting] and [Federal Reserve Chairwoman] Janet Yellen. For the day look for a 10.5000 -10.6300 range.’
The Pound’s advance on the South African Rand was triggered by the UK’s better-than-forecast annual GDP data.
On the year, the UK economy expanded by 3.2% in the second quarter. Economists had originally forecast a figure of 3.1%.
Quarter-on-quarter, the UK economy grew by 0.8%, in line with initial estimates.
Economist Rob Wood said this of the results; ‘Events in Ukraine are weighing on the internationally exposed manufacturing sector. Once tensions ease, business confidence and investment can rebound across Europe, returning some balance to the UK’s strong expansion.’
There was a lack of economic news for South Africa today but the commodity-driven currency could fluctuate in response to today’s US reports, including the influential University of Michigan Confidence gauge.
If the measure shows the improvement forecast, the US Dollar could end the week on a high.
Investors will also be taking an interest in the US industrial production report.
Production is expected to have increased by 0.3% in July on the month, up from expansion of 0.2% in June.
Manufacturing Production is expected to post a 0.5% monthly increase following expansion of 0.1% in June.
Pound to Rand Forecast
Next week fluctuations in the Pound Sterling to South African Rand exchange rate could be caused by South Africa’s Inflation Rate report.
Investors will also be focusing on the UK’s figures, including the Rightmove House Price report, Consumer Price Index, Retail Price Index, Producer Price Index, the Confederation of British Industry’s Trends data, UK Retail Sales figures and the UK’s Public Finance data.
Unless the UK’s reports impress, the Pound Sterling to South African Rand exchange rate could continue trending in its present range.
That being said, any resurgence in geopolitical tensions could be detrimental for the commodity-driven Rand.
The Pound to Rand exchange rate hit a high of 17.9180.
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