EUR/ZAR Exchange Rate Rises as French Covid-19 Crisis Improves ‘Slowly But Surely’
The Euro to South African Rand (EUR/ZAR) exchange rate rose by 0.1% today. The pairing is currently trading around R20.431.
The single currency edged higher today as the coronavirus death rate slows in Spain and Netherlands. This boosted market optimism over the possibility that some of Europe’s most heavily hit nations could now begin to take cautious steps towards an economic recovery.
French Prime Minister Emmanuel Macron also commented that the French Covid-19 situation was improving ‘slowly but surely’ but warned that the health crisis was not yet over.
Today also saw Germany re-open some non-essential shops to boost the nation’s economy, while schools are set to reopen in early May.
German Conservative Party Leader, Armin Laschet, however warned:
‘We will not be able to go back to our normal lives for a long time.’
In Germany’s economic news, today saw the release of the Producer Price Index for March, which fell below forecasts from -0.4% to -0.8%.
However, the Euro’s (EUR) gains continue to be held back by rising concerns over the European’s Union’s unity following weeks of conflict between EU leaders over the implementation of a ‘coronabonds’ relief package.
Meanwhile, single currency investors are now beginning to assess the political ramifications throughout the bloc as the coronavirus continues to put a strain on north-south relations within the EU.
South African Rand (ZAR) Falls as Risk-Off Markets Weigh on South African Currency
The South African Rand (ZAR) opened weaker today as global growth fears continue to hit riskier assets.
South Africa has the highest amount of confirmed coronavirus cases in sub-Saharan Africa, with the figure currently at 3,158 and 54 fatalities caused by the virus.
Cyril Ramaphosa, South Africa’s President, warned that the nation’s lockdown would continue for some time, adding that even if it was lifted ‘effects will continue to be felt for some time’.
The risk-sensitive South African Rand is also struggling amid rising fears over the global economy. This follows comments from the International Monetary Fund’s Chief Economist, Gita Gopinath, who warned:
‘[E]ven by the end of 2021, we’re expecting level of economic activity to be below what we had projected before the virus.’
The South African Rand (ZAR) will remain sensitive to global economic developments this week, with any further fears of an imminent recession – or an increasing number of cases in South Africa – weakening the ZAR/EUR exchange rate.
EUR/ZAR Forecast: South African Rand to Ease on Darkening Global Economic Outlook
Euro (EUR) investors will be keeping a close eye on tomorrow’s release of the German ZEW Survey of Economic Sentiment for April. If this significantly falls below forecasts, we could see the single currency begin to fall as the bloc’s economic outlook continues to deteriorate.
However, the South African Rand (ZAR) is unlikely to make any significant gains against the Euro, with the nation continuing to tackle its own coronavirus crisis amid darkening forecasts for the global economy.
Source: David Moore