The Ethereum to ZAR pair is composed of a popular cryptocurrency and a fiat currency coming from an economy with weak economic fundamentals. This combination could bring traders good profits: even a slight change in the fundamentals of a fragile economy may change the ETH to ZAR exchange rate.
Ethereum was introduced in 2015 by a Russian-Canadian programmer Vitaly ‘Vitalik’ Buterin. It is an open-source platform that utilises blockchain technology to create and execute distributed applications (DApps). Users can create or join so-called ‘smart contracts’ directly without third parties, limiting the possibility for fraud.
Ethereum is commonly used as the name of the associated cryptocurrency but in fact, Ethereum is the system or network while Ether or ETH is the native currency. Users need to have Ether when they want to execute a certain transaction through the system.
The factors can be divided into two groups: the ETH related and those affecting the general cryptocurrency market.
Ethereum specific factors:
General factors related to the crypto world:
The rand with its currency code ZAR has been the official currency of South Africa since its introduction on February 14, 1961. The Rand replaced the South African pound at a rate of two rand to the pound. ZAR is accepted in Namibia and is also legal tender in two other countries, Swaziland and Lesotho.
Economic conditions have a major influence on the ZAR exchange rate as the country has a fragile economy. Pay attention to factors such as supply and demand, inflation and interest rates, the acceptance of ZAR in everyday transactions and the political situation in South Africa.
Changes in the level of exports and imports have a significant impact on the currency value. Increases in South African exports may strengthen the ZAR value, whereas lower demand for the exported goods may have an adverse effect on the domestic economy. Some of the most important trading partners are China, Germany, the US, the UK and India.
The level of acceptance of the rand. When more people and businesses use ZAR it may boost the confidence in this currency, which may affect its value on the forex markets.
High-interest rates can attract foreign capital into the economy, which will have a positive effect on the ZAR value. However, pay attention to the inflation rate before opening a position with the ETH/ZAR pair. A high inflation rate may diminish the positive effects for outside investors.
Forecasts regarding the South Africa economy also have a significant impact on the national currency. The actual performance is even more important: poor economic figures may hinder the ZAR exchange rate, while stronger than expected performance may appreciate ZAR value.
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