The Pound Sterling to South African Rand (GBP/ZAR) exchange rate strengthened by around 0.50% on Friday morning.
In the wake of disappointing domestic data, the Pound softened versus many of its major peers. Additional declination can be attributed to political uncertainties as Britain draws closer to a general election.
The South African Rand, meanwhile, softened across the board despite relatively positive data. The depreciation is as a result of Eskom, South Africa’s largest energy provider, having troubles with maintenance. The issue with equipment has seen the company struggle to meet demand. Further declination is as a result of African Bank’s lack of transparency with regards to investments.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate is currently trending in the region of 17.8110.
Pound Sterling (GBP) Exchange Rate Softens on Disappointing Data
British data printed poorly on Friday which caused the Pound to soften versus the majority of its most traded currency rivals. The GfK Consumer Confidence Survey was expected to gain from 1 to 2, but the actual result held at 1.
Managing director of social research at GfK, Nick Moon, said: ‘The drop to -4 in December is looking more like a discrepancy. Other than that one month, the index has been at -1 plus or minus 2 for all of the last 11 months.’
In addition to a disappointing consumer confidence print, the Lloyds Business Barometer declined from 52 to 45.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate has fallen to a low today of 17.6760.
South African Rand (ZAR) Exchange Rate Dives on Energy Crisis
On Thursday Eskom announced that there had been no improvement in the power grid, admitting that the system remained severely constrained. This saw the Rand soften as traders speculated that black-outs would have a damaging affect on day-to-day business.
Spokesperson Khulu Phasiwe said; ‘Our engineers are still working on repairing those units that are currently out for maintenance. As soon as those are repaired then obviously it will help to improve the situation.’
Additional Rand declination is as a result of waning confidence in African Bank Investments Ltd., who have revealed very little information regarding their rescue plan from the collapse in August. The silence ‘increases investor uncertainty and stimulates the concern,’ said Jean Pierre Verster, an analyst at 36ONE Asset Management. ‘We don’t know what’s happening with their disbursements, loan book growth or shrinkage, bad debt emergence or any other financial information required to make an informed decision regarding participation in the expected capital raising.’
Pound Sterling to South African Rand (GBP/ZAR) Exchange Rate Forecast to Hold Gains
Despite the fact that the forthcoming British general election is weighing on Sterling investment, the Pound Sterling to South African Rand (GBP/ZAR) exchange rate is likely to hold gains for the remainder of Friday. South African Trade Balance data is unlikely to have much impact as the issues with Eskom and African Bank Investments overshadows data.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate has reached a high of 17.8520.