The past week has seen the Euro to South African Rand (EUR/ZAR) exchange rate fluctuate wildly, mainly on account of a series of commodity price shifts and severe data shortages on both sides of the line. A high for the common currency in the pairing has been 17.1055 seen yesterday, while a converse low of 16.67654 was recorded on December 29
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. Peaks and troughs have been a regular occurrence since then, although the Euro may be in for a period of sustained growth in the pairing if the available forecasts for the rest of the week prove accurate.
The current week has been largely damaging to the value of the single currency so far, with Germany’s December Consumer Price Indices falling on previous figures on Monday in all cases. Somewhat more positively, earlier on in the day the Eurozone, Italian and German Manufacturing PMIs for December all rose, but again this was marred by a lacklustre contribution from France.
Today, the overall value of the common currency has again been lowered due to Germany’s December Unemployment Rate not shifting from 6.3% and the Eurozone CPI Core and Estimate yearly December printings failing to rise as had been forecast.
South African data has been in scarcely present supply since the New Year, therefore investors have been forced to refer to news of an expired trade deal that has brought heavy criticisms on the South African government.
Based on conditions set by US President Barack Obama, the South African government had been given the condition of lowering restrictions on US agricultural exports to their country, with the revoking of a duty-free status on South African produce being imported into the US being the penalty for failure. The deadline was the end of the 2015, but reports are that the smaller nation’s government are still attempting to salvage the apparently tattered trading arrangement.
For the rest of this week, Euro/South African Rand exchange rate movement may occur as a result of tomorrow’s December Composite and Services PMIs from Germany and the Eurozone as a whole, in addition to South Africa’s Standard Bank PMI for December. On Thursday, South Africa’s only other economic publications of note will be released in the form of the December Foreign Exchange Reserves and Total New Vehicle Sales.
Taking the reins from this point will be Germany’s remaining economic publications of the week, which stretch across Thursday and Friday and cover the nation’s Retail and Construction PMIs for December and Trade Balance for November.
Unless a highly unpredictable event takes place to suddenly boost the appeal of the Rand before the weekend, it seems set to end the week in a disadvantageous position due to the generally optimistic nature of forecasts for the Euro’s many results.
In virtually all cases, economists are predicting Germany’s high-impact printings to come out positively, although it is worth noting that Eurozone annual November Retail Sales are actually expected to fall from 2.5% to 2% on Thursday morning.