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Euro South African Rand (EUR/ZAR) Exchange Rate Rises as SARB Holds Interest Rate

EUR/ZAR Exchange Rate Edges Higher as SARB Holds Rates in Hopes of Steady Growth

The Euro South African Rand (EUR/ZAR) exchanged rated edged higher today and is currently trading around R16.4843.

The South African Rand (ZAR) weakened against the single currency today as the South African Reserve Bank (SARB) held its interest rate at 6.75%. South Africa’s Monetary Policy Committee said that it saw ‘little evidence of demand side pressures in the economy.’

Sanisha Packirisamy, a Chief Economist at Momentum Investments, warned investors, however, saying:

‘So, whether or not interest rates remain unchanged this coming week, do your best to repay your current debt and avoid taking on unnecessary future debt to ensure you’re not further negatively impacted by any future interest rate hikes that may lie ahead.’

ZAR has continued to suffer from souring sentiment towards emerging market currencies today, following the huge slide in the Turkish lira yesterday.

The Euro increased following the publication of the German Harmonized Index of Consumer Prices figures for March, which slowed to 1.5% and fell below expectations.

Mario Draghi, the President of the European Central Bank (ECB) also indicated that the bank could delay interest rates this year, blaming global risks as weighing on the Eurozone’s economy.

EUR/ZAR Exchange Rate Rises Despite Poor Spanish Inflation Figures

Today also saw the publication of the Spanish CPI figures for March which came in at 0.4% which fell below the expected increased to 1.6%. This has left some Euro traders feeling disappointed today, as the Spanish economy shows no signs of a swift recovery.

The South African Rand failed to benefit from the positive South African PPI figures for February today, which increased above expectation to 0.3%. These were followed by the year-on-year PPI figures for February which also increased.

The Euro, meanwhile, gained on the weakened South African Rand despite weaker-than-expected Eurozone business climate figures for March, which fell to 0.53 against February’s 0.69.

EUR/ZAR Forecast: Euro Could Benefit from UK Brexit Consensus

ZAR traders will be looking ahead to the South African private sector credit figures for March tomorrow, which are expected to decrease.

Tomorrow will also see the release of the South African trade balance figures for February, and with any signs of an improvement this could see the ZAR rise.

Euro traders, meanwhile, will be awaiting tomorrow’s publication of the German retail sales figures for February, which, however, are expected to slow down.

These will be followed by the German unemployment figures for March.

The EUR/ZAR exchange rate will, however, be dictated by political developments into next week, with any signs of the UK conceding upon a Brexit deal with the EU potentially benefiting the single currency.