British Pound to South African Rand (GBP/ZAR) Exchange Rate Strong Following UK Data
The Pound to South African Rand (GBP/ZAR) exchange rate is currently trading at 18.2780, following positive data for the UK and unsettlement amongst workers in South Africa.
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The GBP to ZAR exchange rate has seen highs on Thursday of 18.3203 and lows of 18.2258, showing a market movement of 0.12%.
The Pound has been bullish in the currency market of late, after positive figures have enhanced hopes for an interest rate hike in the UK before the close of 2014.
Moreover the Pound to Rand exchange rate has been particularly strong amid the South African NUMSA striking.
However, Wednesday saw a small pocket of optimism for the South African economy when Retail Sales data reached a higher than forecast 0.8% MoM in May.
Reuters commented: ‘The market is divided on whether concerns about weak growth will outweigh those over rising inflation when the central bank concludes its fourth policy meeting of the year on Thursday.’
South Africa has recently been surrounded by fears over a recession on the horizon, after 2014 saw a five month platinum mining strike, which was followed by the NUMSA strike which will enter its fourth week next week.
Tradition Analytics have stated: ‘Despite the upside surprise in retail sales, broader economic metrics affirm a weak macroeconomic outlook, and this will keep the South African Reserve Bank reluctant to meaningfully hike interest rates. There is though a possibility for the bank to raise interest rates at its monetary policy committee tomorrow, albeit by a smaller 25 basis point increment.’
However the Rand has faced volatility in recent weeks as NUMSA are into their third week of striking.
Nissan and Toyota have both closed production centers in South Africa following the strike action as over 220,000 members have downed tools, with another 100,000 likely to become involved.
Conversely, Wednesday proved an interesting day for the Pound, with the UK economy creating more jobs than expected, unemployment levels have fallen to a six year low. However this was dimmed slightly by wages increasing by less than expected, showing that wage enhancement was lacking within the UK economy.
UK Prime Minister David Cameron commented: ‘Today’s (Wednesday’s) figures show more people have the security of a job than ever before. Full employment is a key aim of our long-term economic plan.’
With political tensions causing instability for the South African Rand, employers are hoping to manage a swift end to the strike to allow production to reach its full capacity as soon as possible.
Alternatively the Pound is seeing a great deal of strength through UK data figures, encouraging the likelihood that Sterling will remain strong in coming weeks.