The GBP ZAR exchange rate has remained fairly steady over the past week

By on October 31st, 2012.
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The GBP ZAR exchange rate has remained fairly steady over the past week.

Foreign Currency Market Update – GBP / ZAR Update

The GBP ZAR exchange rate has remained fairly steady over the past week, oscillating in a tight range either side of the 14.00 level. South Africa’s bitter labour dispute rumbles on, but the relative performance of the Rand now indicates that the situation has been largely factored-in to current prices for GBP ZAR. This has allowed market participants to once again focus on the economic fundamentals which drive the pair.

Last week’s interim budget in South Africa, delivered by Finance Minister Pravin Gordhan, saw the official government growth forecast for 2013 trimmed from 2.7% to 2.5%, triggering renewed upside pressure on the GBP ZAR exchange rate, which was added to when GDP growth data for quarter 3 was released in the UK. This data revealed that levels of British economic activity had expanded by a more-than-respectable 1.0% in the three months to the end of September, representing the largest quarterly increase in UK growth since 2007. The mere suggestion that there is indeed light at the end of the tunnel for the British economy sent the GBP ZAR exchange rate up to its intra-week high of 14.1358.

However, the Rand ended the week with some positive momentum, thanks to two strong pieces of economic data in the US. Thursday’s Durable Goods Orders figure and Friday’s Q3 GDP growth number both bettered analysts’ expectations, causing an uptick in global appetite for risk which favoured risk-sensitive currencies including the high-yielding Rand. This saw the GBP ZAR exchange rate tumble to 13.8860 before close of business on Friday.

The Rand has continued its positive performance into this week’s session, with global stock markets registering healthy gains, indicating a continued appetite for risk. With a series of South African data releases, including domestic Trade Balance and PMI figures, due out this week, further movement appears likely for the South African tender. A positive showing for these South African data sets could see the GBP ZAR exchange rate head back down towards the band of support at 12.60 which it encountered in the middle part of summer.

Heads Up

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

Related posts:

  1. Sentiment surrounding Sterling has remained fairly positive this week
  2. The GBP ZAR exchange rate has surged during the past week
  3. The forward move for GBP ZAR over the past week has been driven by Rand weakness
  4. Pound to South African Rand Exchange Rate Forecast: The past week has brought considerable volatility for the GBP ZAR exchange rate
  5. Pound to South African Rand Exchange Rate Forecast: The Pound followed a steady decline against the South African Rand

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