The Pound Sterling to South African Rand (GBP/ZAR) exchange rate surged by around 1.40% on Tuesday afternoon.
As the South African Rand tracks Euro losses, in the wake of rising speculation that Greece will leave the Eurozone, the emerging-market asset softened versus the majority of its most traded currency rivals. Generally damp market sentiment is also aiding the Rand’s downtrend despite relatively positive domestic data results.
The Pound Sterling, meanwhile, is trending higher versus most of its major peers after British economic data printed positively. Additional Sterling gains can be attributed to British government officials making strides towards safeguarding the UK against the rising possibility of a Greek exit from the Eurozone.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate is currently trending in the region of 17.8500.
Pound Sterling (GBP) Exchange Rate Gains on Grexit Safeguarding
With mounting speculation that Greece will force an exit from the Eurozone, and with general uncertainty as to how it will affect the financial markets, the UK governments meetings to attempt to safeguard Britain against a domino effect has been received positively by traders.
‘If Greece left the Euro that would create real instability in financial markets in Europe,’ U.K. Treasury chief George Osborne said. ‘That’s why we have got to avoid this crisis getting out of control, which is why we have got to make sure we have an international effort to resolve the standoff and here in Britain we step up our contingency planning to prepare for whatever is thrown at us.’
British data also printed relatively positively, in so much as it equalled or bettered estimates, which aided the Pound’s uptrend.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate has fallen to a low of 17.5680 today.
South African Rand (ZAR) Exchange Rate Softens on Geopolitical Tension
Given that the South African Rand is sensitive to Euro movement, it is unsurprising that the emerging-market currency softened versus the majority of its most traded currency rivals. Even reasonably positive data wasn’t enough to micrify significantly dampened risk appetite.
South African Unemployment eclipsed estimates of a rise from 25.4% to 25.7%, with the actual result dropping to 24.3%. It is fair to say, however, that this is still far too high which is highlighting the government’s inability to tackle this issue.
Manufacturing Production advanced on both a yearly and monthly basis in December, but the data had minimal impact on Rand movement.
Pound Sterling to South African Rand (GBP/ZAR) Exchange Rate Forecast to Hold Gains
With market focus dominated by proceedings in Europe, the Pound Sterling to South African Rand (GBP/ZAR) is very likely to hold gains for the remainder of Tuesday. British growth estimate data will impact movement, but it won’t be significant enough to overshadow dampened market sentiment and a lack of demand for risk-correlated assets.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate climbed to a high today of 17.8390.
