The current market bias for the EUR to INR exchange rate is bearish.
Key drivers include the interest rate differential with the European Central Bank holding rates steady while signaling concerns over euro strength, which may subdue inflation. As for macroeconomic factors, recent projections indicate an improving economic outlook for the Eurozone, led by growth in Germany, which typically supports the euro. Additionally, the Indian rupee is projected to weaken against the US dollar, likely affecting its performance against the euro.
In the near term, the EUR/INR pair is expected to trade within a stable range. Recent price data shows it is currently near 105.4, which is higher than its three-month average of 103.7, indicating some upward pressure.
Upside risks could arise from a stronger-than-expected performance in Eurozone economic data or improved trade relationships impacting the INR positively. Conversely, a deterioration in risk sentiment due to geopolitical tensions or persistent inflation could lead to a downturn in the euro's value.