The EUR to HKD exchange rate is currently range-bound.
Key drivers include:
- The European Central Bank's flexible interest rate policy, which is focused on maintaining economic growth while keeping inflation under control.
- The projected growth of the Eurozone economy at 1.6% for 2026, aided by fiscal measures and increased military spending.
- Hong Kong's stable monetary policy, with the Hong Kong Monetary Authority expected to keep interest rates steady, supporting the HKD.
In the near term, the EUR to HKD exchange rate is expected to trade within a stable range, not deviating significantly from recent levels.
Upside risks include further strengthening of the euro should the U.S. dollar weaken due to disappointing economic data. Conversely, a downside risk could stem from geopolitical tensions in Europe impacting economic stability, which may create volatility against the HKD.