This is due to an incoming South African event, a State of the Nation (SONA) address from President Jacob Zuma.
Last week saw the Euro Rand exchange rate trend in a narrow range.
Euro Rand Losses Seen as Greek Debt Crisis Escalates on German Comments
The Euro has been softened today by further developments in the Greek debt crisis, which have mainly focused on sharp remarks from the German Finance Minister.
Commenting on the issue, Wolfgang Schauble alarmingly stated that;
‘We can’t undertake a debt haircut for a member of the European single currency, it’s ruled out by the Lisbon Treaty. For that, Greece would have to exit the currency area. The pressure on Greece to undertake reforms must be maintained so that it becomes competitive, otherwise they can’t remain’.
Offering a different take in response to Schauble was former Greek Finance Minister Yanis Varoufakis, who argued that the situation was akin to;
‘giving a credit card to a bankrupt entity in order to keep paying its debt, and then giving it another credit card and another. As long as you do that, Greece is unreformable and that is an indictment on the whole functioning of the Eurozone’.
South African Rand Appreciates ahead of Zuma’s 2017 SONA Speech
The Rand’s modest gains came ahead of a potentially tumultuous SONA speech from President Jacob Zuma.
Against the backdrop of bringing hundreds of soldiers in to maintain order, Zuma is expected to focus on empowering black citizens who were displaced under apartheid, as well as a possible commentary on education fees.
South African data has been highly mixed of late; December’s annual mining production has risen out of a negative range and improved on the month, while annual manufacturing in the same month has turned negative.
EUR/ZAR Exchange Rate Forecast
For the remainder of this week and the next, Euro/South African Rand exchange rate movement may occur as a result of Friday’s French and Italian industrial production results, Tuesday’s Eurozone-wide GDP stats and next Friday’s Eurozone construction output figures
Both French and Italian production is forecast to fall in December, while Eurozone-wide GDP for Q4 is set to pick up on the quarter and the year.
Next week’s South African stats will focus on Q4 unemployment on Tuesday along with inflation for January on Wednesday. The previous unemployment rate figure was still a high one, coming in at 27.1%.