Pound Sterling to South African Rand (GBP/ZAR) Exchange Rate Trends below 18.000, Movement Forecast
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Over the last five day’s South Africa’s inflation figures, the Bank of England’s dovish meeting minutes and below forecast UK retail sales figures all contributed to the Pound’s decline against the Rand.
Consequently, although the strike in the metal working sector is ongoing, the Rand still managed to outperform its British counterpart.
The latest news has shown that the National Union of Metalworkers of South Africa (NUMSA) is continuing with its current strike action. Even though regional branches did accede to a wage offer, they stood firm against conditions applied to future pay negotiations.
The main issue preventing the strike from being resolved is Section 37, a clause which is designed to stop unions from making further demands once a deal has been signed.
In the opinion of a NUMSA representative; ‘The settlement will stand or fall on Section 37’.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate hit a low of 17.8160 on Friday.
The Pound failed to benefit from the UK’s on-target second quarter GDP data.
As expected by economists, the UK economy expanded by 0.8% in the second quarter of the year.
The result had little impact on Sterling’s appeal.
On Thursday the US Dollar to South African Rand (USD/ZAR) exchange rate managed to achieve a two-month high in spite of impressive US Manufacturing PMI and Initial Jobless Claims figures.
The emerging-market asset was bolstered by China’s impressive manufacturing report and stronger-than-forecast fundamentals from the Eurozone.
The Rand’s performance against the US Dollar prompted this response from market analyst Anisha Arora; ‘In the near term, it does look like the SARB has managed to put a lid on Dollar/Rand gains and a break below 10.50 to targets in 10.30-40 is possible.’
If today’s US Durable Goods Orders data prints above expected levels, it is possible that the Rand may cede some of its advance before the weekend.
Pound Sterling to South African Rand Forecast
Next week several factors could influence the direction taken by the GBP/ZAR exchange rate.
Both South Africa’s Unemployment Rate and Producer Price Index are likely to have an impact on the appeal of the Rand. The nation’s Balance of trade data will also be worth noting, as will China’s manufacturing PMI.
Disappointing results could cause Rand weakness, as could signs that the metalworkers strike is far from resolved.
Meanwhile, the main UK reports to be aware of include the nation’s Mortgage Approvals report and GfK Consumer Confidence Survey.
Positive UK fundamentals could help Sterling recover from this fairly dismal week and may see the Pound Sterling to South African Rand (GBP/ZAR) exchange rate trend in a slightly stronger position.
The Rand is currently trading against the US Dollar in the region of 10.5373 and trading against the Pound in the region of 17.8820