- Pound stable on the whole – Confidence falls and trade deficit expands
- South African Rand steady against peers – IMF cuts forecasts for 2016 growth
- ZA Treasury defiant in response – Government promises action on improving economy
- US could shift ZAR today – BoE interest rate to be decided next week
The Pound has been positive against peers recently, though recent domestic data has done little to facilitate this rise.
The South African Rand has been a strong contender on the global markets, thanks to a rapid government reaction to IMF dovishness.
UK Economic News: Poor Confidence and Trade Data Fails to Dent Pound’s Appeal
In a continued picture of resistance, the Pound has advanced against a number of peers today, despite the only actual data from the UK being negative.
Earlier on, the Gfk consumer confidence result for the post-Referendum period showed an alarming drop from -1 to -9, while more recently, the national trade balance deficit has expanded in all three fields, though not by as much as was expected.
Movement for the Pound today has consisted of a minor dip against the South African Rand (GBP/ZAR) and gains of 0.3% against the US Dollar (GBP/USD) and 0.4% against the Canadian Dollar (GBP/CAD).
South African Rand Steady against Peers on Responses to IMF Downgrade
The value of the South African Rand has been seen as high for investors lately, with the Rand managing to post gains against the Pound (ZAR/GBP), the Euro (ZAR/GBP) and the US Dollar (ZAR/USD).
This comes as something of an anomaly, given that the latest news concerning the nation has come from the International Monetary Fund (IMF), which has slashed its 2016 growth predictions for the country from 0.6% to a paltry 0.1%.
The actual appreciation of the Rand is likely due to the Treasury’s response to the news; the governmental department released a statement after the IMF announcement that read:
‘National Treasury forecast is more positive compared to the IMF. In the immediate term, we expect growth and employment to be supported by several structural reforms and targeted government interventions’.
Future GBP, ZAR Forecast: US Payrolls Stats out Today, BoE Rate Decision due Next Week
Although no further UK or South African economic announcements are due today, that pairing may still be influenced by major US economic announcements that are due in the afternoon.
These will consist of the unemployment rate and change in non-farm payrolls stats for June; respectively, a rise in unemployment is forecast along with a big increase in the number of jobs added to the US economy.
While these results are not directly linked to the Pound or the Rand, positive outcomes could push the US Dollar up in appeal, which would devalue the Rand and allow the Pound the advance against the South African currency.
Looking further ahead, the week to come will bring a sparse selection of UK economic announcements, with most of the focus of economists settling on Thursday, when the Bank of England (BoE) will announce its July interest rate decision.
In the wake of the ‘Brexit’ vote, forecasts have been incredibly gloomy, with a rate cut from 0.50% to 0% on the cards according to some economists.
Current GBP, ZAR Exchange Rates
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate was trending in the region of 19.0540 and the South African Rand to Pound Sterling (ZAR/GBP) exchange rate was trending in the region of 0.0525 today.