Euro to South African Rand (EUR/ZAR) Exchange Rate Static on Falling Eurozone Economic Confidence

Declining Eurozone Confidence Levels leave EUR/ZAR Exchange Rate Tight

The Euro (EUR) has held close to opening levels against the South African Rand (ZAR) today, with unsupportive developments limiting demand for both currencies.

Eurozone economic confidence has been reported lower in September, with the latest reading making 9 months in a row of losses.

South African Rand to Euro (ZAR/EUR) Exchange Rate Movement Restricted by Strong US Dollar

The South African Rand (ZAR) has been steady against the Euro (EUR) today, with the latest US news limiting interest in the Rand.

The US central bank, the Federal Reserve, has hiked interest rates from 2% to 2.25%, which has sent the US Dollar rallying.

In turn, this has reduced the appeal of both the Rand and the Euro due to reduced risk sentiment and better savings rates in the US.

Euro to South African Rand Forecast: Will EUR/ZAR Exchange Rate Rise on German Inflation Rate Figures?

The Euro (EUR) might be able to rise against the South African Rand (ZAR) later on today, when German data and European Central Bank (ECB) speeches are due.

In the former case, Germany’s preliminary inflation rate figures for September are out this afternoon and could raise confidence among Euro traders.

Year-on-year and month-on-month inflation rates aren’t expected to shift from 2% and 0.1% respectively, but these figures could still trigger a EUR/ZAR rate rise.

The European Central Bank’s (ECB) inflation target is ‘near but below 2%’, so a repeat German printing on 2% could raise EUR trader hopes for a future interest rate hike.

Beyond the German price growth stats, the Euro could also rise against the Rand when ECB President Mario Draghi gives a speech.

Mr Draghi is capable of boosting Euro demand if his outlook is especially positive, so a hint for a 2019 interest rate hike could push the EUR/ZAR exchange rate higher.

On the other side of the pairing, the South African Rand could next be influenced by Friday morning’s Q3 consumer confidence reading.

This is tipped to show a reduction in sentiment levels during the third quarter, which could worsen the Rand to Euro exchange rate before the weekend.

Adam Solomon

Adam joined the team at TorFX soon after graduating from University in 2005 with a degree in Journalism. Since then Adam has advanced to become both Head of Trading and Head of Treasury. His keen interest in the currency market and knowledge of what drives exchange rates makes him perfectly positioned to produce regular market updates focused on the movements of the major currencies.

Contact Adam Solomon