Over the past week, the Euro to South African Rand (EUR/ZAR) exchange rate was trending within the range of 13.3766 to 13.6911.
The Euro has seen significant fluctuations over the past week as a result of geopolitical uncertainty. After Greece accepted creditor demands in order to unlock financial aid, the shared currency advanced versus its major peers. However, with the deal proving unpopular with many economists and with mounting speculation that Greece will not recover without some form of debt relief, geopolitical uncertainty once again caused Euro volatility.
The South African Rand, meanwhile, has seen significant fluctuations in response to US Dollar changes. A general depreciation can be linked to speculation that the Federal Reserve will soon hike the benchmark interest rate. Additional depreciation can be linked to ongoing difficulties with Eskom, South Africa’s largest energy provider.
The Euro to South African Rand (EUR/ZAR) exchange rate advanced by around 0.7% during Thursday’s European session.
On Thursday the Euro strengthened versus many of its currency rivals in response to Greek MPs having voted to accept a second package of creditor demands. It looks increasingly likely that the Hellenic nation will receive financial aid which has eased trader tensions significantly. A significant drop in Eurozone Consumer Confidence to -7.1 wasn’t enough to offset common currency gains. Many economists still fear that the current bailout deal will only delay the inevitable with Greek debt looking to be unattainable at current levels.
The South African Rand declined versus its major peers on Thursday despite the South African Reserve Bank (SARB) increasing the benchmark interest rate by 25 basis points. The Rand’s depreciation is the result of US Dollar strength after US jobs data bettered estimates. Additionally, the Rand has seen dampened demand amid ongoing difficulties with Eskom as they load-shed in order to minimise stress on the tired electrical grid.
The Euro to South African Rand (EUR/ZAR) exchange rate dropped to a low of 13.5400 during Thursday’s European session.
Looking ahead, many economists are predicting that the single currency will depreciate despite easing concerns regarding Greece. This is due to the fact that traders will shift focus from geopolitics on to monetary policy. The European Central Bank (ECB) cut the cash rate comparatively recently and President Marion Draghi is adamant that the full course of quantitative easing is necessary.
For those invested in the South African Rand, US Dollar volatility will have a significant impact. Also, any news from Eskom is likely to cause Rand fluctuations. In terms of economic data, traders will be looking towards Tuesday’s Unemployment Rate which is forecast to drop from 26.4% to 25.8% in the second-quarter.
The Euro to South African Rand (EUR/ZAR) exchange rate was trending within the range of 13.5400 to 13.6992 during Thursday’s European session.