Pound to South African Rand Exchange Rate Forecast: The South African Rand ended last week’s session with a flourish

By on August 8th, 2012.
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The South African Rand ended last week's session with a flourish.The early part of this week has seen GBP ZAR stage a mini-recovery to trade back into the 12.80s today.

Foreign Currency Market Update – GBP / ZAR Update

The South African Rand ended last week’s session with a flourish, as global investors took heart from stronger than anticipated US employment data. July’s Non-Farm Payrolls number revealed that 163,000 new jobs had been generated in the world’s leading economy last month, suggesting that America is showing signs that it is emerging from its economic slump. The positive news saw share markets and the Rand register healthy gains as the week drew to a close, sending the GBP ZAR exchange rate downwards from above 13.00 on Thursday, into the 12.60s by Friday afternoon.

The early part of this week has seen GBP ZAR stage a mini-recovery to trade back into the 12.80s today. The uptick for the pair comes in spite of this morning Bank of England inflation report, which saw the UK’s central bank cut its growth forecast for 2012 from May’s 0.8% down to 0.0%. In combination with this morning’s disappointing German export data and a warning from France’s central bank that the Gallic nation is set to slide back into recession this quarter, the BoE’s dismal prognosis for the British economy has taken the edge off investors’ appetite for risk. This has hit the South African tender harder than most.

GBP ZAR has broken through the 13.00 barrier on several occasions since mid-May’s visit to 13.3942. On each occasion, the pair has failed to eclipse this multi-year high, suggesting that a strong band of resistance exists at this level. If the current forward move fails to top the most recent high of 13.1060, which was reached a week ago, then a negative signal would be sounded. This signal would be re-enforced by consecutive closes below last month’s 3-month low of 12.5953. Clients needing to purchase Rand in the near-term should consider taking care of a portion of their requirement sooner rather than later in case such a scenario unfurls.

Heads Up

Summary of major upcoming data releases that we think may move the market.

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  4. Pound Sterling to South African Rand Foreign Currency Exchange Rate Forecast – Rand up on Record Gold Prices
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