The Pound Sterling to South African Rand (GBP/ZAR) exchange rate is trending within a tight range on Monday. This is as a result of a complete absence of data pertaining to both the UK and South Africa. Compounding the staticity is the extremely quiet currency market whilst traders relax over the festive holiday season. A slight Sterling declination can be attributed to shaky sentiment towards UK banks, whilst the Rand has gained a little from a softer US Dollar.
The Pound Sterling to South African Rand exchange rate is currently trending in the region of 18.0250.
Pound Sterling (GBP) Ticks Lower on Negative Sentiment towards UK Banks
Although the Bank of England’s stress tests on British banks showed that they were able to cope with unforeseen financial crises, sentiment towards the institutions is still very shaky. ‘The minutes of December’s Financial Policy Committee meeting said confidence was still shaky after a slew of scandals including foreign exchange rigging, for which six banks got £2.6 billion in fines last month,’ stated Russell Lynch, writer for The Independent. According to the minutes, the FPC ‘noted that recent misconduct and other operational failings had highlighted that rebuilding confidence in the banking system would require more than financial resilience’.
One major concern outlined by the BoE was the threat of cyber-terrorism and UK banks ineffective safeguards. They warned that banks currently view cyber attacks as a ‘technical’ problem, rather than an issue which merits ‘board-level attention.’ The minutes stated; ‘[This is an issue], given the evolving nature of cyber threats and the key importance of cyber resilience to the continuity of financial services.’
The Pound Sterling to South African Rand exchange rate has dropped to a low today of 17.9760.
South African Rand (ZAR) Exchange Rate Strengthens on Softer US Dollar
Whilst the US Dollar softens as a result of disappointing data and quiet trading, the emerging-market South African Rand strengthened against many of its competitors. A complete absence of data, however, has seen the gains gradual and somewhat laboured.
Further appreciation could be as a result of improved developments in the energy industry. Recent controlled power cuts has amped serious doubt as to the viability of South Africa’s energy market, but Prseident Jacob Zuma painted a different picture; ‘We have a program to grow the energy so that we grow the economy,’ he said in an interview on state-owned South African Broadcasting Corp. today. ‘We’ve got clear policies, we are making budgets necessary to deal with it.’
Pound Sterling to South African Rand (GBP/ZAR) Exchange Rate Forecast to Hold Steady
Given that there is a complete absence of domestic data to provoke significant changes, the Pound Sterling to South African Rand exchange rate is likely to continue trending within a tight range. With that being said, however, the Rand may continue trending higher if the US Dollar continues to decline.
The Pound Sterling to South African Rand exchange rate has reached a high today of 18.1480.