EUR/ZAR Exchange Rate Hit by Volatility as Trade Tensions Remain
The Euro to South African Rand (EUR/ZAR) exchange rate is trading in a wide range on Thursday morning as growing trade uncertainty prompts significant volatility in the pairing.
At the time of writing EUR/ZAR exchange rate is down by around 0.3% from this morning opening levels, having briefly racing around 0.5% higher earlier in the session.
South African Rand (ZAR) Exchange Rate Volatile as Trade War Fears Impact Emerging Markets
The Euro to South African Rand (EUR/ZAR) exchange rate is struggling to find stable ground today, with market remaining skittish in the face of ongoing global trade war fears.
These fears have considerably impacted the Rand in recent weeks, with emerging currencies being the main casualties in an escalating trade dispute between the US and China.
The latest development has seen US President Donald Trump alter his approach to protecting sensitive US technologies, as he apparently steps back from plans to impose broad restrictions on Chinese investment in the US.
Any hopes that this would deescalate tensions where quickly scuppered however as White House economic adviser Larry Kudlow said this did not constitute a softening stance on China.
At the same time the South African Rand is also being hurt by on ongoing wage dispute between state power utility Eskom and labour unions, which has seen the country suffer from electricity load-shedding as workers remain on strike.
Euro (EUR) Exchange Rate Struggles as Eurozone Jitters Rise Ahead of EU Summit
Meanwhile the Euro (EUR) exchange rate is facing some of its own hurdles this morning in the run up to the latest EU summit.
28 leaders from across the European Union will meet in Brussels later today for the start of a two-day summit, which looks set to be dominated by the EU’s ongoing migrant crisis.
The meeting looks to be a far from a friendly affair however, with observers suggesting that the summit could see some frustrations over the situation begin to bubble over.
EU Commission chief Jean-Claude Juncker even went so far as to warn that the very stability of the EU is under threat as he suggested ‘the fragility of the EU is increasing,’ adding that ‘the cracks are growing in size.’
While we are still a long way off any suggestions that the whole EU project could collapse, these fractures will likely confound attempts by Germany and France to push for greater unity.
EUR/ZAR Exchange Rate Forecast: Robust German Inflation to Strengthen the Euro?
Looking ahead, the EUR/ZAR exchange rate could find its feet again later this afternoon as markets await the release of Germany’s latest Consumer Price Index (CPI).
Euro (EUR) investors are hopeful that today’s figures will paint a positive picture of inflation in the Eurozone, with economists forecasting that the bloc’s largest economy will have seen inflation dip only very slightly this month after racing higher in May.
Meanwhile the South African Rand (ZAR) may attempt to close out this week’s session in a more positive position, with South Africa’s latest trade data expected to report that the domestic trade surplus rebounded in May.