The three year high of 13.6122 for GBP ZAR, set in the middle part of the month, still stands as a significant level for the pair

By on September 25th, 2012.
Connect with this author on

The Rand has continued its comeback against Sterling in the early part of this week’s session, sending the GBP ZAR exchange rate down to 13.3135 in early trading today.The Rand has continued its comeback against Sterling in the early part of this week’s session, sending the GBP ZAR exchange rate down to 13.3135 in early trading today.

Foreign Currency Market Update – GBP / ZAR Update

The three year high of 13.6122 for GBP ZAR, set in the middle part of the month, still stands as a significant level for the pair. Last Thursday’s break to 13.5756 was the closest we have come to eclipsing this high in the intervening period, but ultimately this move higher’s failure to beat 13.6122 sends out a negative signal for the pair.

The upside break for GBP ZAR last week was fuelled by ongoing concerns regarding the state of the global economy. The release of more weak manufacturing data from China and a disappointing set of Japanese trade figures ensured that investor sentiment was subdued in the middle part of the week, placing pressure on the South African tender.

However, Thursday afternoon’s announcement from the South African Reserve Bank that it had elected to maintain its key domestic interest rate at 5.00% proved supportive for the ZAR – a minority of analysts had been factoring-in another rate cut by the SARB. The decision added to the downward pressure on the GBP ZAR exchange rate which had followed the release of the latest set of Bank of England minutes the day before. The BoE minutes revealed that the Bank’s nine-man policy committee had held lively discussions on whether an extension to the £375bn it has already allocated to the UK’s Quantitative Easing programme was warranted. As per previously, even a hint of further QE was bad news for Sterling.

The Rand has continued its comeback against Sterling in the early part of this week’s session, sending the GBP ZAR exchange rate down to 13.3135 in early trading today. The pair’s three year high of 13.6122 now appears a long way off, however with data from China and recent international trade figures from the world’s leading economies suggesting that a worldwide slowdown activity remains firmly on the cards, a shift out of risk, which would hurt the Rand harder than almost any other currency, seems possible. On the credit side for the Rand, last week’s announcement by striking miners at the Marikana platinum mine that they would accept Lonmin’s pay offer, signalling an end to recent violent protests, could prove to be a game-changer for the ZAR. If GBP ZAR continues to trend lower off its near-term high, another visit to the pair’s key interim floor of 13.0151, which it last reached on 10th September, looks a possibility.

Heads Up

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

Related posts:

  1. GBP ZAR broke to a multi-year high of 13.3942 during the middle part of this month
  2. The AUD came under further selling pressure in the middle part of last week
  3. The middle part of last week’s session saw the Pound receive a boost
  4. The Pound rallies to the highest level this year against the Dollar, as oil prices hit an eight month high
  5. Sterling stands firm as UK Average Earnings rise year-on-year, shrugging off poor unemployment data

Article source: http://feedproxy.google.com/~r/ForeignExchangeOutlook/~3/EK7iQOgWQ0g/

Leave a Reply

WP Facebook Auto Publish Powered By : XYZScripts.com
Bunk Beds