Pound to South African Rand Exchange Rate Forecast – The currency markets saw the GBP ZAR exchange rate break down into the 11.70s

Written by on March 13th, 2012

Pound to South African Rand Exchange Rate Forecast - The currency markets saw the GBP ZAR exchange rate break down into the 11.70sThe ZAR has continued its forward move this week, seeing the GBP ZAR rate drop to 11.7624 during today’s session, its lowest level since September 19th last year.

Foreign Currency Market Update – GBP / ZAR Update

Last Friday’s session in the currency markets saw the GBP ZAR exchange rate break down into the 11.70s for the first time since last September. The move was driven by Rand strength, triggered by an improvement in investor sentiment following the acceptance of a debt-swap deal by Greece’s creditors and by stronger than anticipated US employment data. The key US Non-Farm Payrolls data for February showed that 227,000 new jobs had been generated in the non-agricultural sectors of America’s economy. It was the third month in a row that the world’s most-active economy had created over 200,000 jobs – good news for the prospects of a global recovery in 2012.

Support for the Rand had ebbed in the middle part of last week as institutional investors trimmed their exposure to risk due to the uncertain outcome of Greece’s debt swap negotiations. Appetite for risk had been on the back foot since the week’s session started, thanks to China’s first downgrading of its annual growth target for eight years.

The ZAR has continued its forward move this week, seeing the GBP ZAR rate drop to 11.7624 during today’s session, its lowest level since September 19th last year. The multi-year high of 13.3578, which the pair reached in November, now looks a long way off. With four consecutive monthly closes lower in the interim period, GBP ZAR is stuck firmly in a downward trend. In the absence of some as yet unseen global event, this downtrend is likely to prevail, with July 2011′s low of 10.6405 providing a medium-term target. Clients needing to buy Rand may wish to consider attending to at least a portion of their requirement sooner rather than later, in case the pair does trade down to this level.

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