EUR/ZAR Exchange Rate Edges Higher as South African Business Confidence Struggles
The Euro (EUR) edged higher against the South African Rand (ZAR) today and is currently trading around R16.0676.
The South African Rand struggled following the publication of the South African business confidence figures for February, which fell against January’s 95.1 to 93.4, a five-month low.
The South African Chamber of Commerce said in a statement:
‘[The] South African economy faces serious challenges… These challenges are now deeply entrenched and need to be handled with urgency and care. The upcoming elections do not only serve as an opportunity to establish credible representation, but also provide a platform to come to a rational and sustainable economic policy framework that carries the support of the business community.’
ZAR is particularly sensitive to the US-China trade talks, as China is one of South Africa’s largest trading partners. However, with little in the way of news emerging from the discussions between the two superpowers, this has left many Rand traders feeling jittery.
The Euro, meanwhile, gained today following the release of the German Construction PMI figures for February, which improved on the consensus at 54.7.
Eliot Keer, an Economist at IHS Markit, commented:
‘The accelerations in activity and new order growth will be a welcomed boost for builders after January’s slowdown.’
EUR/ZAR Exchange Rate Rises as Euro Traders Brace for Tomorrow’s Eurozone Growth Figures
There are no other significant Eurozone economic data publications due for today, with many Euro investors focusing on political developments instead.
Brexit remains in the spotlight for many EUR investors, with the recent lack of a breakthrough between the UK and the EU over the Irish backstop weighing on sentiment.
This has dampened any confidence in the possibility of a consensus emerging which could secure a deal between the UK Parliament and the European Commission.
Many EUR traders, however, will be looking ahead to tomorrow, which will see the European Central Bank (ECB) make its latest interest rate decision.
EUR/ZAR Outlook: South African Rand to Remain Sensitive to Chinese Data
Euro traders will be awaiting the publication of the Eurozone’s GDP figures for the fourth-quarter tomorrow, and with any signs of improvement this could buoy the single currency further.
These will be followed by the ECB’s monetary policy statement and press conference, and if there are any dovish statements about the state of the Eurozone economy we could see the EUR/ZAR exchange rate weaken.
ZAR traders, meanwhile, will be looking further ahead to Friday, which will see a raft of Chinese data stats; any improvements of its closest trading partner’s economy could provide some uplift for the struggling South African Rand.
