Euro South African Rand (EUR/ZAR) Exchange Rate Rises on Better-than-Expected Eurozone GDP
The Euro South African Rand (EUR/ZAR) exchange rate has edged up today, and the pairing is currently trading at an inter-bank rate of R16.0419.
Data released on Tuesday morning revealed that the Eurozone’s preliminary GDP rose by a higher-than-forecast 1.2% in Q1 2019.
In the three months leading to March, GDP rose by 0.4%, giving the single currency a boost.
However, The Wall Street Journal’s Paul Hannon pointed out that growth was still stronger in 2017. He tweeted:
‘The Eurozone economy rebounded in the first three months of the year, and more strongly than had been expected. GDP was up 0.4% double the prior rate of growth, an annualized 1.5%. So back to where it was in the first half of 2018, but nowhere near its 2017 peak.’
Eurozone Unemployment Slides to Decade-Low
Meanwhile, further data revealed that the Eurozone’s unemployment slid to a decade-low of 7.7%.
Unemployment within the bloc fell to the lowest level since September 2008, the start of the global financial crisis, with the unemployment figure slipping by 1.172 million in the Eurozone, which likely provided the Euro with an upswing of support.
Further data revealed that unemployment in the wider European Union fell to 6.4% in March, the lowest level in 19 years.
South African Rand (ZAR) Slides on Disappointing Chinese Data and Election Tensions
On Tuesday, the Rand (ZAR) weakened following the release of some disappointing Chinese manufacturing data.
An unexpected softening in Chinese factory activity dented demand for risk-sensitive currencies such as the South African Rand.
The Caixin manufacturing PMI revealed that while the data showed the overall health of the sector improved, it was at a softer pace.
Meanwhile, with the South African elections only nine days away, and political tensions intensifying, the Rand could be facing a difficult time.
Data published by Bloomberg revealed that the Rand typically strengthened in the month before an election.
This was usually followed by a weakening of the South African currency in the 30 days following the election.
Euro South African Rand Outlook: Will the EUR/ZAR Rise on a Steady Demand for ZA Exports?
This afternoon the South African Rand (ZAR) could rise against the Euro (EUR) following the release of the latest South African Trade Balance.
If March’s trade figures show that there is a steady demand for South African exports, the Rand could strengthen.
Meanwhile, the Euro could also get a boost this afternoon following the release of Germany’s Harmonised Index of Consumer Prices.
If April’s preliminary figure rebounds after March’s fall, the Euro South African Rand (EUR/ZAR) exchange rate could rise.