With violent protests at South African mines continuing following the shooting dead of 34 striking miners at the Marikana mine last month, a shift out of the Rand by market participants remains possible.
Foreign Currency Market Update – GBP / ZAR Update
Last week’s session proved to be a landmark one for the GBP ZAR exchange rate; the pair spiralled to a new multi-year high at 13.4378 thanks to a renewed shift out of Rand-denominated assets by institutional investors.
GBP ZAR has seen now seen three distinct spikes higher over the last 12 months. The first came last November and took the pair to a new near-term high at 13.3578. May 2012 saw a move up to 13.3942, eclipsing last winter’s move upwards to register a fresh high. Last week’s upside move just about managed to steal the mantle from May’s extant multi-year high. With successive ‘highs getting higher’, a technical uptrend appears to be in place for the pair.
The start of this week’s session has seen GBP ZAR retrace back down from last week’s high to trade back into the 13.20s on the day, as speculators take profit at top of the range rates. The move has come in spite of weak Chinese manufacturing data, released over the weekend and Fed Chairman Ben Bernanke’s failure to announce any further specific stimulus measures for the US economy on Friday. The two aforementioned breaks higher for the pair have been immediately followed by technical moves lower – in the case of November’s high all the way down to 11.7624 and to 12.5953 following May’s peak. For this reason, clients needing to purchase Rand in the near-term would be wise to consider taking care of at least a portion of their requirement sooner rather than later.
However, with violent protests at South African mines continuing following the shooting dead of 34 striking miners at the Marikana mine last month, a shift out of the Rand by market participants remains possible. If such a move came to pass, then a break above last week’s 13.4378 would send out a highly positive signal for GBP ZAR.
Summary of major upcoming data releases that we think may move the market.
- GBP ZAR broke to a multi-year high of 13.3942 during the middle part of this month
- South African Rand Foreign Exchange Forecast – Rand hits multi year highs…
- The Pound rises above $1.5279 against the Dollar as a swing in risk sentiment sees investors back high-yielding assets
- The Sterling Rand exchange rate has seen two major breaks higher within the past year
- The Pound broke down to a new multi-year low of 1.4686 against the Australian Dollar