The Pound Sterling to South African Rand (GBP/ZAR) exchange rate has fallen slightly today, which serves as a clear indicator of how badly the UK’s economic stability is presently perceived. The Rand (ZAR) has slumped against all but GBP, owing to severe unrest in the national parliament.
GBP/ZAR Exchange Rate News: UK Budget Fiddling Dominates Sterling Downtrend Today
The Pound (GBP) has crashed against virtually all of its rivals today owing to a crushing level of doubt among investors over the future performance of the UK economy.
This has mainly stemmed from last Wednesday’s 2016 Budget Announcement, which immediately met with controversy on the proposal to cut disability benefits in order to meet a targeted Budget surplus in 2020. Two days later, Secretary of State for Work and Pensions Iain Duncan Smith resigned on the scheme, which triggered Chancellor George Osborne to announce the dropping of the cut by ‘ringfencing’ disability incomes.
As it stands, however, this leaves a £4bn hole in the previously ‘watertight’ budget. On account of this, the Chancellor is set to deliver a revision of the Budget in the House of Commons today, which is set to be severely limited by additional uses of ‘ringfencing’ on other UK sectors and areas.
Pound Sterling losses today have been made up of -0.2% against the South African Rand (GBP/ZAR), -0.3% against the Euro (GBP/EUR), -0.6% against the US Dollar (GBP/USD) and -1% against the Australian Dollar (GBP/AUD).
South African Rand (ZAR) Trumps Sterling on Precious Metal Prices
With the South African Parliament becoming more fractured by the week, the Rand (ZAR) has nonetheless managed to record a small gain against the Pound (ZAR/GBP) on the news that platinum and gold prices are currently rising. This situation was an echo of last week, when the South African Reserve Bank (SARB) hiked the interest rate.
Less supportively, Bruggemans & Associates Consulting Economist Cees Bruggemans has stated that current South African forecasts of 0.9% growth ‘appear unrealistic’ and that the fear of recession ‘rules the roost practically everywhere now’.
GBP/ZAR Exchange Rate Forecast: BoE Speeches and ZA Inflation Rate Results Ahead
The next pieces of UK economic data due out will be speeches from Bank of England (BoE) officials Kristin Forbes and Sarah Breeden.
South African input before Good Friday will consist of tomorrow morning’s unimpressively forecast inflation rate results for February.
Current GBP, ZAR Exchange Rates
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate was trending in the region of 21.8450 and the South African Rand to Pound Sterling (ZAR/GBP) exchange rate was trending in the region of 0.0457 today.
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