EURZAR Forecast highlights:
- EURZAR rebounded sharply from 18.5 support; year-long downtrend still intact
- Watch to buy more Euros near 19.0
- Euro may strengthen if ECB pauses easing cycle
How has EURZAR performed recently?
While the South African Rand has underperformed against USD and GBP, its price trend against the Euro appears more positive.
The rate depreciated sharply back in 2022/23. Prices rose from 16.0 all the way to above 21.0. But that peak was almost two years old now. EURZAR has been retracing beneath 20.0 since the middle of 2024 (see below). This means less Rands are needed to buy one Euro.
The key question, however, is whether Euro’s weakness will persist going forward. The rate recently bounced from the long-term support at 18.5 to pause the downtrend.
Moreover, day-to-day macro dataflow emanating from South Africa is Rand-neutral. In fact, growth forecasts of the South African nation are generally subdue. As such, Euro-Rand may start to flatten at around 19.0.
Is it a good time to buy EUR?
A year ago, it took 20.5 Rand to buy a single Euro. Now, it requires about 19.2. In other words the Rand has appreciated somewhat against the Euro.
But the last few months the rate is more volatile. Prices dropped to 18.50 but rebounded sharply from there.
Therefore, if you need more Euros watch to buy some when the rate approaches 19.0 – and exchange more Euros in the 18.5-19.0 band.
Of course, you may wish to wait until prices reassert the year-long downtrend once more. But this is by no means guaranteed. The Euro could easily rebound from here to push the rate back to 19.6.
Will the Euro get stronger?
New geopolitical realignment is being forced upon continental Europe. Every day brings new political development from major European countries. Germany, for example, is facing new elections this week.
These macro factors undoubtedly are influencing the value of the Euro.
But generally, the currency is holding steady in the face of geopolitical lashing. Against the USD, the rate is recovering back to 1.040-1.050. Versus Sterling, the Euro is trading at around 1.200.
So will the Euro strengthen this year? The Eurozone currency depreciated in the last quarter of 2024 when the European Central Bank started cutting rates consistently. But this is no longer a ‘sure thing’.
One ECB member, Isabel Schnabel, recently commented in a FT interview that “we now have to start the discussion on how far we should go.” With inflation rates now refusing to drop further, chances of a pause on rate cuts are on the rise.
This may influence the Euro if the ECB freezes the monetary easing cycle. A rebound in the Euro is not to be ruled out in the coming quarters.
What is the EURZAR forecast in weeks
Market forecasts of EURZAR are tilting towards a more bullish ZAR.
Most predictions centred below the current price level at 19.2. If we cast our eyes roughly a year into the future, the rate is expected to challenge the 18.0 support level.
But are these forecasts overly positive on ZAR? Hard to say. The rate may reaffirm the downtrend or trade sideways in equal probability.
As a follower of the rate, we just need to take advantage of the rate when it drops further.
Source:exchangerates.org.uk
Jackson is a core part of the editorial team at GoodMoneyGuide.com.
With over 15 years industry experience as a financial analyst, he brings a wealth of knowledge and expertise to our content and readers.
Previously Jackson was the director of Stockcube Research as Head of Investors Intelligence. This pivotal role involved providing market timing advice and research to some of the world’s largest institutions and hedge funds.
Jackson brings a huge amount of expertise in areas as diverse as global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.
Jackson has a PhD in Finance from Durham University and has authored nearly 200 articles for GoodMoneyGuide.com.
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