The Euro has risen against the South African Rand overall this week, although the EUR/ZAR pairing has slumped today in response to a central bank interest rate decision. The pairing has fluctuated between 17.9605 and 16.9955 over the course of this week.
Euro Capitalised on Employment Stats
The Euro hit its high on Tuesday when the Eurozone employment data for the fourth quarter came out. The quarterly result reprinted at 0.3%, but in a more supportive development a rise from 1.1% to 1.2% was recorded for the annual offering. As a result of these printings, employment in the Eurozone rose to its highest level since 2009.
Euro has Tougher Time Today on Inflation Rate Outcomes
Today has brought only one major Eurozone economic announcement, the currency bloc’s inflation rate data for February. The results were decidedly mixed; the core annual contribution increased from 0.7% to 0.8% but the crucial base annual result remained at -0.2%. While this met comfortably with forecasts it did nothing to inspire mass confidence in Eurozone investors.
South African Rand Surges on SARB Interest Rate Decision
The current week has brought little in the way of domestic data for the South African economy, but the few events that have occurred have generated a significant amount of movement for the Rand.
Yesterday saw the January retail sales announced; on the year sales fell from 4.1% to 3.1% while on the month consumer spending fell -0.3%.
Today, the second and last data day of the week for South Africa, has granted the Rand an unexpected source of support that has sent it skyrocketing against its rivals.
This has been the South African Reserve Bank (SARB) electing to raise the interest rate from 6.75% to 7% against forecasts of a rate freeze. Someone who did predict the hike was Standard Chartered Chief Economist for Africa Razia Khan, who remarked after the news ‘There are risks…South African growth is weak’.
EUR/ZAR Exchange Rate Forecast
Future Euro/South African Rand exchange rate movement may occur as a result of Tuesday’s German IFO surveys of business climate, the current assessment and expectations for March, along with Wednesday’s South African inflation rate stats for February.
At the time of writing, the only available forecasts were for South African inflation to fall on in the base monthly and core annual fields, but post a rise from 6.2% to 6.38% for the base yearly outcome.