Euro to South African Rand Exchange Rate Slumps after Days of Steady Movement
The Euro to South African Rand (EUR/ZAR) exchange rate had been holding its ground fine for most of the week so far, but the South African Rand (ZAR) has gradually recovered before seeing a surge in demand today.
After opening this week at the level of 16.04, EUR/ZAR briefly touched on a one month high of 16.18 yesterday.
This was due to signs of strength in the Eurozone economy and a broadly weak South African Rand. Since then though, EUR/ZAR slipped lower and this afternoon is plunging.
At the time of writing, EUR/ZAR is trending near a fortnight low of 15.87 and the pair could see further losses.
Euro (EUR) Exchange Rates Strength Limited as Investors Await European Central Bank (ECB)
This week’s Eurozone data has been decent and has generally helped to boost the Euro’s (EUR) support.
However, the data has not been enough to lead to notably stronger market demand for the Euro. Instead, investors are eagerly anticipating tomorrow’s European Central Bank (ECB) policy decision before making any fresh moves on the shared currency.
The ECB is not expected to make any changes to monetary policy, but uncertainty over the tone the bank will take on the Eurozone outlook is keeping the Euro from strengthening.
Today’s French business confidence data fell slightly short of expectations. It followed yesterday’s German and Eurozone economic sentiment stats from ZEW, which were much better than expected.
South African Rand (ZAR) Exchange Rates Rebound on Hopes for South African Utilities
South Africa’s broad economic concerns have been a significant downside factor in the South African Rand in recent months.
Among the biggest of these concerns is South Africa’s embattled energy company, Eskom.
South Africa’s energy crisis continues to concern markets, but the government has made saving it its top priority.
Hopes that Eskom could be saved, as well as higher market demand for riskier currencies amid a recovering global growth outlook, were part of the South African Rand’s strong rebound today.
Reportedly, Eskom and South Africa’s treasury are in talks with banks for solutions. There are not yet major developments, but this as well as hopes that South Africa will help to safe South African Airways as a national airline, both helped the Rand today.
Euro to South African Rand (EUR/ZAR) Exchange Rate Awaits European Central Bank (ECB)
The Euro has taken a backseat in Euro to South African Rand (EUR/ZAR) exchange rate movement in recent sessions, but that could change towards the end of the week.
The European Central Bank (ECB) will hold its anticipated January policy decision tomorrow, and this will be followed on Friday by Eurozone PMI projections for this month.
Investors are awaiting the ECB’s outlook on the Eurozone economy, following signs of recovery in the economy recently.
If the bank is more dovish than analysts are hoping for, the Euro could remain weak going forward.
On the other hand, a more optimistic ECB, as well as fresh signs of strength in Friday’s Eurozone PMI projections, could give the Euro the strength it needs to sustain a more solid advance.
As for the South African Rand, investors will be focused on South African economic and political developments for now.
Any surprising shifts in market risk-sentiment could also influence the Euro to South African Rand (EUR/ZAR) exchange rate.