The Euro to South African Rand (EUR/ZAR) exchange rate advanced by around 0.43% on Friday afternoon.
After talks went sour during the Eurogroup meeting in Riga, the shared currency softened versus many of its major peers. Eurozone Finance Ministers directed heated remarks to Greek Finance Minister Yanis Varoufakis and made it plain that time was running short for Athens to produce acceptable reforms. However, the declination was halted somewhat, thanks to better-than-expected German economic data.
The South African Rand, meanwhile, slumped versus the majority of its most traded currency rivals on Friday. With Xenophobic riots escalating, the South African Parliament has been suspended so that officials can attend to their local areas. Although the South African military has been deployed in order to break up the fights, there has been little progress to stem the violence.
The Euro to South African Rand (EUR/ZAR) exchange rate is currently trending in the region of 13.1944.
Euro (EUR) Exchange Rate Trending Lower with Greece on Thin Ice
The relationship between Greece and Eurozone officials has taken a turn for the worst, it seems, after Friday’s meeting in Riga saw little by way of progress. With the Greek Finance Minister reportedly taking a ‘hammering’ from high-ranking officials, fears that Greece has overstepped the mark and their lack of pace has swelled speculation of a forced Greek exit from the Eurozone.
‘I would describe today’s meeting as a complete breakdown in communication with Greece,’ Maltese Finance Minister Edward Scicluna said.
However, Varoufakis saw the outcome quite differently, as Associated Press explains; ‘Greece’s Varoufakis conceded there were differences that still need to be bridged but insisted that a deal ‘will happen and will happen quickly as it’s the only option we have.’ He also sought to counter claims that talks had not advanced. He said there’s been a lot of progress on issues such as privatization, reforming the tax system, the judiciary, the bureaucracy and product markets.’
‘We look at the last few weeks and what we see is convergence,’ he said.
The Euro to South African Rand (EUR/ZAR) exchange rate has fallen to a low of 13.1070 today.
South African Rand (ZAR) Exchange Rate Softens despite Bearish US Dollar
Ordinarily, a softer US Dollar would have spurred demand for emerging market currencies such as the South African Rand. However, significantly dampened market sentiment amid fears of a Grexit has seen emerging market currencies trending lower versus many of their major peers.
The Rand has declined significantly as riots against immigrants continue to plague the diverse nation. Political economist, Moeletsi Mbeki warned that; ‘South Africa is a bomb waiting to explode, all it needs is a little match to spark it and it will go up in flames.’
‘We have had the military deployed to the townships before, using the tactics employed by the National Party is not going to solve the challenges the country is facing, this will not solve the problems creating unrest,’ he added.
Euro to South African Rand (EUR/ZAR) Exchange Rate Forecast to Hold Gains
Given the extent of the South African riots, and with the issues leaning on economic progress, the Euro to South African Rand (EUR/ZAR) exchange rate is likely to hold gains for the remainder of Friday’s European session. However, with fears of a Grexit weighing on demand for the single currency, EUR/ZAR could level out over the weekend.
The Euro to South African Rand (EUR/ZAR) exchange rate climbed to a high of 13.2690.