Despite mixed British data on Friday the Pound is steadily gaining against the South African Rand. This can be attributed to fading trader risk appetite after the International Monetary Fund reported issues with global economic growth.
The Pound Sterling to South African Rand exchange rate is currently trending in the region of 17.8400.
A huge softening of the US Dollar on Thursday caused risk-sensitive and emerging market currencies to appreciate. As an emerging market currency the South African Rand was one of those that benefitted from the ‘Greenback’ (USD) downfall.
However, a disappointing set of South African economic data publications stymied the potential Rand gains from improved risk sentiment. Yearly Mining Production was forecast to rise from the revised previous figure of -7.0% to -6.2%, but the actual result showed a declination to -10.1%. Additionally year-on-year Manufacturing Production advanced below the median market forecast of a rise from -8.1% to -1.07%, with the actual data reaching -1.2%.
The Pound Sterling to South African Rand exchange rate has fallen to a low today of 17.7850.
A report from the International Monetary Fund on Friday has all but dissolved trader risk appetite. The report indicated that a fresh financial crisis could be provoked by excessive risk taking on global markets, a risk encouraged by a prolonged period of ultra-low interest rates.
With a complete absence of domestic data on Friday the South African Rand has tumbled as a result of trader risk aversion strategies.
A mixed-bag of British data on Friday has stymied Sterling gains. Total Trade Balance showed a positive increase from -£3079 to -£1917, despite having only been expected to rise to -£3000. Seasonally adjusted Construction Output, however, was less impressive having declined from 4.3% to -0.3% in spite of a market consensus of a drop to 2.9%.
Forecast for the Pound Sterling to South African Rand Exchange Rate
Given that there is a high likelihood that traders will continue to adopt risk aversion strategies amid anxieties that another financial crisis is looming, it is likely that the South African Rand will continue to depreciate against the majority of its most traded currency competitors. An absence of economic data is also potentially detrimental.
Sterling is likely to endure volatility after several Bank of England policymakers make speeches throughout the course of Friday. With several UK officials linking Sterling overvaluation to inflationary pressures, however, it is highly unlikely that the speeches will contain any hawkish overtones for fear of bolstering the Pound exchange rate.
The Pound Sterling to South African Rand exchange rate has advanced to a high today of 17.8940.
South African Rand (ZAR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
South African Rand,
,US Dollar,0.0899,
South African Rand,,Euro,0.0709,
South African Rand,,Pound,0.0560,
South African Rand,,Australian Dollar,0.1031,
US Dollar,,South African Rand,11.1190,
Euro,,South African Rand,14.0855,
Pound Sterling,,South African Rand,17.8525,
Australian Dollar,,South African Rand,9.6926,
[/table]
