The Euro to South African Rand (EUR/ZAR) exchange rate declined by around -0.37% on Thursday afternoon.
Despite the fact that French Inflation data provided positive results, the shared currency dived versus its major rivals. The depreciation is the result of growing pessimism regarding Greece’s ability to appease creditors whilst avoiding sacrificing electoral integrity. There is very little time left for the Hellenic nation to unlock aid.
The South African Rand, meanwhile, softened versus most of its currency competitors after domestic data produced disappointing results. Adding to the Rand downtrend is a stronger US Dollar and dampened market sentiment amid geopolitical unrest in Europe.
The Euro to South African Rand (EUR/ZAR) exchange rate is currently trending in the region of 13.9056.
Euro (EUR) Exchange Rate Forecast to Soften against the South African Asset as Greece Makes an Enemy of Time
French Inflation bettered estimates on both an annual and a monthly basis in May, with Harmonised Inflation also eclipsing expectations. However, this had minimal impact on the shared currency as Greece’s continued woes weigh heavily on investor confidence.
After an informal meeting between Greek Prime Minister Alexis Tsipras, German Chancellor Angela Merkel and French President Jean-Claude Hollande, there was absolutely no progress made regarding Athens’ reform proposal. With time against the Hellenic nation, many European officials are now warning that it’s decision time and not time to stretch out negotiations. Jens Weidmann, the influential president of Germany’s central bank, issued a warning to Greek officials that Euro-area countries cannot continue to fund this adjustment process. ‘Taxpayers from other Euro-area countries have provided substantial funds to support the unavoidable adjustment process,’ Mr Weidmann said in a speech in London. ‘But time is running out.’
The Euro to South African Rand (EUR/ZAR) exchange rate has fallen to a low of 13.8850 today.
South African Rand (ZAR) Exchange Rate Forecast to Tick Higher versus the Shared Currency despite US Dollar Strength
Against most of its major peers the South African Rand declined on Thursday. This was predominantly the result of US Dollar strength after US retail sales rebounded from a period of stunted growth. In addition to the US Dollar surge, the ongoing Greek woes have significantly dampened market sentiment and demand for emerging-market currencies.
South African economic data publications produced poor results on Thursday. On the year, Mining Production increased by 7.7% in April; slightly bettering the market consensus of a 7.68% increase. However, Mining Production dived by -4.1% on the month; failing to meet with expectations of a 2.6% increase. April’s Manufacturing Production saw an annual decline of -2.0%; well below the median market forecast 1.22% increase. On the month, April’s Manufacturing Production also declined by -2.0% despite predictions of a 1.32% increase.
Euro to South African Rand (EUR/ZAR) Exchange Rate Forecast to Hold Losses on Greek Pessimism
Given the absence of further domestic data to drive changes, and with mounting pessimism regarding the likelihood that Greece will stay as a member of the Eurozone, the Euro to South African Rand (EUR/ZAR) exchange rate is likely to hold losses for the remainder of Thursday’s European session. Friday could see EUR/ZAR volatility in response to Eurozone Industrial Production data.
The Euro to South African Rand (EUR/ZAR) exchange rate reached a high of 14.0189 today.