The Euro to South African Rand (EUR/ZAR) exchange rate has experienced a rocky few days of trading.
Although a bullish US Dollar, Fed rate hike expectations, South African energy supply concerns and dampened risk appetite all piled pressure on the Rand, the Euro was also suffering as a result of the lack of progress in the Greek bailout negotiations.
The EUR/ZAR exchange rate fluctuated between highs of 13.1416 and lows of 12.9692.
The Euro even remained trading in a softer position against a number of its peers despite reports showing a decline in the rate of German unemployment and a modest acceleration in Eurozone inflation.
On Wednesday the Rand was boosted as the South African manufacturing sector was shown to have contracted at a slower pace in March.
The KAGISO Manufacturing PMI had been forecast to advance from 47.6 to 53.7 in March.
The measure actually printed at 47.9 – remaining below the key 50 mark separating growth from contraction but showing some signs of improvement.
Separate South African data showed that total new vehicle sales in the nation climbed from a revised 51973 to 55449 last month.
The Rand also benefited from a less-than-impressive US ADP Employment Change report.
The data showed that the US added 189,000 positions in March rather than the 225,000 expected. Given that the Federal Reserve has frequently highlighted the connection between an improved labour market and higher interest rates, this result increased demand for emerging-market and higher risk assets.
With ecostats for both the Eurozone and South Africa in short supply for the rest of the week, additional EUR/ZAR fluctuations may be limited before the weekend.
South Africa is set to publish mining and manufacturing production figures next Thursday, and both sets of numbers have the potential to trigger notable Rand movement.
At the moment economists are expecting manufacturing production to be up 0.3% on the year in February (following an annual figure of -2.3% in January) and for mining production to have advanced by 0.09% on the year, up from a previous annual decline of -2.3%.
Of course data from the Eurozone will also be driving EUR/ZAR movement. Economists will be paying particular attention to final Composite and Services PMIs for the Eurozone’s largest economies, the region’s producer price index and the latest batch of retail sales figures.
German Factory Orders and Industrial Production numbers will also be of note.
Positive European data could bolster the common currency, but investors will be keeping a wary eye on the situation in Greece. If the meeting between Greek and Russian officials points to a union between the two nations, raising the prospect of a ‘Grexit’, the Euro could fall.
During Wednesday’s European session the Euro to South African Rand exchange rate was trading in the region of 12.9903, down from the day’s high of 13.0717.