EUR/ZAR Exchange Rate Edges Higher as SA Traders Await Ramaphosa’s as New Cabinet Reshuffle
The Euro South African Rand (EUR/ZAR) exchange rate is up today and is currently trading around R16.4754 on the interbank market.
The South African Rand (ZAR) struggled against the Euro (EUR) following rising political uncertainty in South Africa, with rising uncertainty around President Cyril Ramaphosa’s cabinet.
Mr Ramaphosa is due to be involved with a marathon discussion with the ANC’s alliance partners today, briefing them on the new cabinet appointments due to take place later this afternoon.
The risk-correlated South African Rand has also weakened on heighted US-China trade war fears, with China now holding a ‘trump’ card over the export of rare earth minerals in the trade conflict.
The editor of the Chinese state-run Global Times, Hu Xijin, tweeted:
‘China is seriously considering restricting rare earth exports to the US.’
The Euro, meanwhile, benefited from the release of the French consumer spending figures for April, which rose above consensus to 0.8%.
The Italian business confidence figures for May, meanwhile, also improved, rising to 102.0.
EUR/ZAR Exchange Rate Increases despite Rising German Unemployment
Today also saw the publication of the German unemployment figures for May, which came in at a worse-than-expected increase of 5.0%, preventing the single currency from making any significant gains against its competitors.
Detlef Scheele, the Chairman of the German Federal Employment Agency, commented:
‘The labour market is showing the first effects of the recent somewhat weaker economic development [with company’s] demands for new employees weakened noticeably at a high level.’
Italian business confidence for May, meanwhile, provided some uplift for EUR, as it exceeded the expected 100.4 decrease and instead rose to 102.0.
Italy’s consumer confidence also improved in May, further bolstering the EUR/ZAR exchange rate.
However, following the European elections tensions between Brussels and Rome have increased, leaving many single currency investors feeling jittery on fears for the EU’s integrity.
EUR/ZAR Outlook: Leadership and Brexit Uncertainty Likely to Weigh on Sterling
South African Rand investors will be looking ahead to tomorrow’s South African PPI figures for April, which are expected to ease against March’s to a consensus of 0.8%.
Tomorrow will also see the release of the SA private sector credit figures for April, which are expected to improve.
Pound Sterling traders, meanwhile, will be focusing on political developments with the big question hovering over who will be the next leader of the Conservative Party, and with ongoing Brexit uncertainty, this is likely to weigh on confidence in Sterling.
