Euro to South African Rand Exchange Rate Finds Support in Eurozone Data
After poor performance from the Euro (EUR) last week, the Euro to South African Rand (EUR/ZAR) exchange rate has recovered all of last week’s losses and then some this week. Investors are selling the Rand (ZAR) amid broad coronavirus uncertainties.
Last week saw EUR/ZAR tumble from 16.04 to 15.87 throughout the week. This week though, GBP/ZAR has quickly recovered all those losses and climbed even higher.
At the time of writing on Thursday, afternoon, EUR/ZAR is trending in the region of 16.30 – the best level for the pair in a month, since December 2019.
The Euro could find even more support if tomorrow’s Eurozone data impresses investors, but a shift in risk-sentiment could cause the pair to quickly lose its ground instead.
Euro (EUR) Exchange Rates Resilient despite European Central Bank (ECB) Rate Cut Speculation
Rising concerns about the potential impact the coronavirus outbreak could have on the global economy have caused fresh European Central Bank (ECB) rate cut speculations to flare up.
Some investors see the possibility of a rate cut from the ECB later in the year if the coronavirus has a notable impact on global growth.
However, despite this the Euro is seeing fairly resilient movement today.
The Euro is benefitting from weakness in rivals that are falling with coronavirus concerns.
On top of this, recent Eurozone data has been decent. Eurozone economic confidence and unemployment beat forecasts, while German inflation got slightly closer to ECB targets.
South African Rand (ZAR) Exchange Rates Slump on Coronavirus Concerns
While the Euro has found some support, most of EUR/ZAR’s gains today were caused by South African Rand weakness instead.
The South African Rand continues to plunge due to market concerns that global growth could be negatively impacted by a coronavirus outbreak spreading from China.
As the South African Rand is a currency often correlated to market sentiment on risk and emerging markets, it has seen notable losses from this week’s coronavirus concerns.
According to Hussein Sayed, Chief Market Strategist at FXTM:
‘Expect to see further declines and more volatility in risk assets in the coming days. Investors who were waiting for the dips to buy may need to wait a little longer, until we see signs of a peak in the rate of virus infection.’
Euro to South African Rand (EUR/ZAR) Exchange Rate Awaits Key Eurozone Data
The Euro to South African Rand (EUR/ZAR) exchange rate has seen significant gains this week so far, but the pair could still lose ground before markets close tomorrow.
Friday’s session will see the publication of most of this week’s most influential Eurozone ecostats.
German retail sales, French growth, Eurozone growth and Eurozone inflation will all be published. If they surprise investors they could cause a shift in Eurozone economic sentiment.
A slew of poor Eurozone ecostats could cause European Central Bank (ECB) interest rate cut bets to rise, and the Euro could shed much of its recent gains.
On the other hand, stronger than expected Eurozone data could make it easier for the Euro to sustain recent gains or even climb higher.
As for the South African Rand, investors may overlook tomorrow’s South African trade balance report in favour of focus on global risk sentiment.
If coronavirus concerns continue to dominate markets, the Rand may struggle to find much support and the Euro to South African Rand (EUR/ZAR) exchange rate is more likely to sustain gains.
