The Euro to South African Rand (EUR/ZAR) exchange rate softened by around -0.61% on Wednesday afternoon.
As traders speculate that Greece will not have the requisite funds to make the first payment to the International Monetary Fund (IMF) on Thursday, the shared currency slumped versus the majority of its most traded currency rivals. Positive domestic data wasn’t enough to overshadow these concerns.
The South African Rand, meanwhile, strengthened versus many of its major peers thanks to a softer US Dollar. The gains are unlikely to be sustained, however, with South Africa’s leading energy provider Eskom having to load-shed with forced black-outs. The troubles with Eskom are said to have cost the South African economy in the region of R400 billion.
The Euro to South African Rand (EUR/ZAR) exchange rate is currently trending in the region of 12.7826.
Euro (EUR) Exchange Rate Declines on Greek Woes
Officials from Athens stated on Wednesday that they have not requested financial aid from Russia. This eased concerns over a Greek exit from the Eurozone, but did not initiate a common currency appreciation.
With Greece due to make their first loan repayment to the IMF on Thursday April 9th, most don’t expect the debt-riddled nation to have the requisite funds. The IMF has stated that it would be willing to give a 30 day extension should Greece default, but the nation is still very unlikely to find the money needed.
Domestic data printed positively on Wednesday, but the results had no impact on single currency movement with trader focus dominated by geopolitics.
The Euro to South African Rand (EUR/ZAR) exchange rate dropped to a low of 12.7517 today.
South African Rand (ZAR) Exchange Rate Strengthens despite Scheduled Black-Outs
As an emerging market currency, the South African Rand strengthened on Wednesday thanks to a soft US Dollar. Speculation that the Federal Open Market Committee (FOMC) minutes from the latest policy meeting will print dovishly initiated the US Dollar downtrend.
The Rand gains are unlikely to be sustained for an extended period, however, with Eskom difficulties causing momentous economic damage. ‘If we’d had enough electricity since 2007 and it was not a limiting factor, the economy could have been about 10 percent bigger than it actually was by the end of 2014,’ Pretoria-based Dawie Roodt said by phone on April 2. ‘That is more than 300 billion Rand ($25.3 billion), or more than a million job opportunities.’
Euro to South African Rand (EUR/ZAR) Exchange Rate Forecast to Hold Gains
Given the lack of domestic data to curb the trend, the Euro to South African Rand (EUR/ZAR) exchange rate is likely to hold gains for the remainder of Wednesday’s European session. With that being said, however, we could see changes if the US Dollar strengthens.
Thursday could see heightened EUR/ZAR volatility with economic data publications due for both Europe and South Africa.
The Euro to South African Rand (EUR/ZAR) exchange rate climbed to a high of 12.8724 today.