Despite the initial headline figures for the Eurozone Composite, Manufacturing and Services PMIs looking impressive, the data hides other indices which are on the verge of another downturn. Although there has been an absence of South African data on Thursday, the Rand has appreciated against the single currency as a result of mixed European data and improved market sentiment.
The Euro to South African Rand Exchange Rate is currently trending in the region of 13.8639.
On Wednesday the Euro depreciated against the majority of its rivals as traders priced in bets that Thursday’s European data would disappoint. A complete absence of domestic data on Wednesday acted as a lubricant to the downward slide.
Anxieties have mounted of late with regards to the potential for the European Central Bank to purchase corporate bonds as part of a quantitative easing stimulus measure. These fears have depressed the common currency which has struggled to shake of a bearish run.
On the flip side of the coin, the South African Rand enjoyed a healthy surge against many of its competitors on Wednesday. This was as a result of the domestic yearly inflation rate which declined from 6.4% to 5.9%. Given that the South African Reserve Bank has set a target between 3 and 6%, this shows inflation to have moved within the parameters of said target.
The Euro to South African Rand exchange rate has dropped to a low today of 13.8369.
Thursday has seen a lot of common currency volatility due to a very mixed bag of data. A downtrend was initiated by the French Services, Manufacturing and Composite PMIs which fell below forecasts.
With German Manufacturing and Composite PMIs showing positive preliminary headline figures the Euro losses were curbed. However, a disappointing preliminary figure in the German Services PMI halted any appreciation.
Finally Eurozone data managed to provoke a short-term Euro uptrend. The Eurozone Services, Manufacturing and Composite PMIs managed to eclipse the median market forecasts.
However, when you look past the headline figures you see a gloomier picture, as Chris Williamson, Chief Economist at Markit states; ‘The Eurozone PMI rose in October but anyone just watching the headline number misses the darker picture painted by the survey’s other indices, which show the region teetering on the verge of another downturn.’
He went on to say; ‘Growth of new orders slowed closer to stagnation and backlogs of work fell at a faster rate, causing employment to be cut for the first time in nearly a year. Business confidence in the service sector also slid to the lowest for over a year and prices charged fell at the fastest rate since the height of the global financial crisis, adding to an increasingly downbeat assessment of business conditions.’
An absence of South African data on Thursday has halted any significant gains. Nevertheless, a slight appreciation can be attributed to improved trader risk sentiment as geopolitical issues ease from investor focus.
Euro to South African Rand Exchange Rate Forecast to Soften
As economists digest the flagging growth in the Eurozone it is likely that the single currency will depreciate. This is especially true if the ECB resorts to stimulus measures to bolster the region.
An absence in South African economic data on Friday will most probably see the Rand face little volatility. Any movement will be dictated by foreign currency changes.
The Euro to South African Rand exchange rate has reached a high today of 13.9286.
South African Rand (ZAR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
South African Rand,
,US Dollar,0.0912,
South African Rand,,Euro,0.0721,
South African Rand,,Pound,0.0569,
South African Rand,,Australian Dollar,0.1040,
US Dollar,,South African Rand,10.9559,
Euro,,South African Rand,13.8599,
Pound Sterling,,South African Rand,17.5530,
Australian Dollar,,South African Rand,9.6148,
[/table]
