The British Pound to South African Rand (GBP/ZAR) and British Pound to Canadian Dollar (GBP/CAD) exchange rates were trending higher in the first half of Tuesday’s European session while the British Pound to Indian Rupee (GBP/INR) exchange rate softened.
The British Pound exchange rate could be in for some major fluctuations on Tuesday when Bank of England (BoE) Governor Mark Carney speaks. Any hawkish remarks from the central banker on the topic of UK interest rates could see the British currency rally.
Investors have recently priced in interest rate hikes following May’s general election, helping the British Pound exchange rate gain some strength.
South African Business Confidence Slips – Rand (ZAR) Exchange Rate Falls
Meanwhile, the South African Rand fell after South African Business Confidence slipped from 51 to 49.
Economist Ettienne le Roux commented: ‘A consumer theme of sorts is re-emerging to the benefit of certain retailers and wholesalers, as well as new-vehicle dealers.’
‘This is just as well, as such service-orientated sectors are less energy intensive than manufacturing, which a loser in the context of current electricity shortages and muted global trade that continues to hamper exports.’
Friday could be another big day for South African Rand movement when SA Manufacturing Production stats emerge. At present, the annual figure is expected to decline from 1.1% to 0.4% in January—a development that could pressure the Rand significantly lower.
The Indian Rupee could also be in for an interesting ride on Friday when Indian Manufacturing Production, Industrial Production and Inflation Rate figures are published.
Annual Industrial Production is expected to fall from 1.7% to 0.7% in January. Manufacturing Production is also expected to slip on the year from 2.1% to 0.19%.
However, Tuesday’s trading could also hold some Rupee movement with the Indian Balance of Trade figure due for publication.
Exciting data releases in Canada could also impact the Canadian Dollar on Friday, with both Net Change in Employment and Unemployment Rate stats out. Joblessness is expected to increase from 6.6% to 6.7% and could be an event that sees the ‘Loonie’ depreciate.
However, tumbling oil prices could also play a factor in Canadian Dollar fluctuations. Crude is Canada’s largest export and therefore any alterations to the price of oil can translate into exchange rate movement.
Furthermore, as oil prices have dropped by over 50% in recent months, producers are facing the harsh reality of profit losses and bankruptcy.
BPZ Resources is the latest to file for bankruptcy, crumbling under the pressure of falling oil prices.
BPZ stated: ‘Our efforts to negotiate additional financing to fund business activities and pursue identified strategic alternatives were further impeded when oil prices plummeted and production growth faltered, creating additional obstacles to our restructuring efforts.’
British Pound Exchange Rate Forecast: GBP/ZAR, GBP/CAD, GBP/INR
British Pound trading will heat up on Wednesday when UK Industrial Production, Manufacturing Production and NIESR Gross Domestic Product Estimate figures will be released.
In addition, the rest of the week is sprinkled with Bank of England speeches from various officials and any talk on interest rate hikes is likely to cause British Pound movement.
The British Pound to South African Rand (GBP/ZAR) exchange rate is trading at 18.4470. The British Pound to Canadian Dollar (GBP/CAD) exchange rate is reaching 1.9066. The British Pound to Indian Rupee (GBP/INR) exchange rate is trending in the region of 94.4870.
