Euro to South African Rand Exchange Rate Struggles to Advance amid Mixed Data
Due to continued concern about the Eurozone’s economic outlook and a recovering South African Rand (ZAR), the Euro to South African Rand (EUR/ZAR) exchange rate briefly touched on its worst levels in months yesterday and is currently attempting to recover.
As the South African Rand gradually recovers, EUR/ZAR has been falling lower and lower over the past month.
EUR/ZAR may be in for yet another week of losses this week too, as it has already fallen from this week’s opening levels of 15.73.
Still, EUR/ZAR has rebounded slightly from yesterday’s low of 15.55, which was the worst level for the pair since February.
At the time of writing, EUR/ZAR was trending closer to the level of 15.65, but its movement was mixed as investors reacted to the day’s data and awaited news expected over the coming days.
Euro (EUR) Exchange Rates Kept Under Pressure by Eurozone Economic Jitters
Demand for the Euro (EUR) has not been strong enough to hold against the gains of more bullish rivals like the South African Rand in recent weeks, as Eurozone data continues to show that the bloc’s economic outlook remains mixed.
Yesterday’s German economic confidence data from ZEW made investors even more anxious about the health of the Eurozone’s biggest economy going forward, and lingering concerns about Germany have kept the shared currency from benefitting from other news.
This morning saw the publication of the Eurozone’s final June Consumer Price Index (CPI) inflation rate report, which came in slightly stronger than expected in some key prints.
Both overall monthly and yearly scores beat projections.
However, as the inflation rates remained well below European Central Bank (ECB) targets, the data did little to influence ECB bets.
South African Rand (ZAR) Exchange Rates Continue to Benefit from Global Central Bank Bets
Despite lasting concerns about South Africa’s ongoing energy issues regarding the state-owned Eskom energy company, the South African Rand has seen continued gains against the Euro and some other major rivals like the US Dollar (USD) recently.
Rather than due to any domestic South African news, the Rand has been benefitting from rising speculation of easing monetary policy among major Central Banks.
Federal Reserve and European Central Bank (ECB) interest rate cut bets are both rising, leaving the US Dollar and Euro weaker and leaving high yielding South African Rand surging in comparison.
Demand for the South African Rand also found a little fresh support this morning, as South Africa’s May retail sales results beat market forecasts.
South African retail sales were expected to slow to 1.6% year-on-year, but instead only slipped slightly to 2.2%.
Still, investors were hesitant to move too much on the South African Rand ahead of tomorrow’s key upcoming South African Reserve Bank (SARB) news.
Euro to South African Rand (EUR/ZAR) Exchange Rate Awaits South African Reserve Bank (SARB)
Euro investors are now likely to look ahead to next week, when key Eurozone data and European Central Bank (ECB) news is expected.
While the Euro has been weighed heavily by European Central Bank easing speculation in recent weeks, the South African Rand has been firming on rival weakness even amid South African Reserve Bank (SARB) interest rate cut bets.
South African interest rates are high, and as a result the Rand has not been hugely negatively influenced by bets that the SARB will cut South African interest rates from 6.75% to 6.50% tomorrow.
Still, the news has softened the South African Rand’s advances this week. The Rand’s movement is likely to be fairly limited until after the bank’s decision.
If the bank takes a surprising stance on its monetary policy outlook looking forward, this could also influence the Euro to South African Rand (EUR/ZAR) exchange rate in the coming sessions.