As a new week of trading began the Euro dropped against the South African Rand.
ZAR gains have mainly been caused by a sharp rise in gold prices following some unsettling behaviour by the new US President.
Despite a few fluctuations in the Euro Rand exchange rate last week, the Euro was nonetheless able to advance from a starting low of 14.34 on Monday to a closing high of 14.55 on Friday.
Euro Interest Limited after ECB President Highlights Eurozone Issues in 2017
The Euro dropped by around -0.5% against the South African Rand at the start of this week, following remarks given by European Central Bank (ECB) President Mario Draghi.
Speaking after receiving the Cavour Prize for his actions benefitting Italy, Draghi stated that issues currently faced by the Eurozone included ‘the effects of the sovereign debt crisis in the Euro area, the UK’s exit from the European Union and geopolitical tensions in Eastern Europe’.
More positive Eurozone news has come from Germany, with Bundesbank estimating that German inflation in January will hit 2%.
South African Rand Advances against Euro after Trump Triggers Gold Price Rally
The Rand has strongly advanced against the Euro on the back of commodity price news on Monday, which has been caused by major instability in the US.
President Donald Trump has started his term by acting unconventionally, choosing to wage a small-scale war against the media for reports on his inauguration, rather than lay out actual policies and plans for the future.
This has weakened demand for the US Dollar considerably, causing gold prices to shoot up in consequence.
EUR/ZAR Exchange Rate Forecast
This week, Euro/South African Rand exchange rate movement may occur as a result of Tuesday’s Eurozone PMI flashes, in addition to German confidence data and a trio Fed speeches.
South African data to be aware of includes Tuesday’s South African Reserve Bank interest rate decision, which is expected in the afternoon.
Covering the Eurozone announcements, Tuesday morning will bring Eurozone, French and German PMI flashes for the manufacturing and services fields. All three manufacturing scores are expected to drop, while preliminary services are set to tick up on the month.
Wednesday’s Ifo German confidence printings are expected to show rising optimism in January, while for Thursday’s early GfK consumer confidence result, a reprint at 9.9 is predicted.
Over late Tuesday and early Wednesday, European Central Bank (ECB) officials Peter Praet, Sabine Lautenschlaeger and Danielle Nouy are set to speak; if they offer positive outlooks the Euro could climb against the Rand.
The only notable South African news this week, the SARB interest rate decision, is expected to result in no change in the interest rate.