The recent exchange rate forecasts for the EUR to INR indicate a stable, yet cautious outlook. Currently, the euro is trading at 104.0 INR, which is 2.4% above its three-month average of 101.6 INR. This slight appreciation has occurred despite the euro experiencing a stable trading range of 5.1%, fluctuating between 99.26 and 104.3 INR. Analysts highlight that the euro's performance is currently influenced by a mix of geopolitical factors, domestic economic policies, and global market dynamics.
The European Central Bank's (ECB) monetary policy remains a focal point for the euro's direction. ECB Vice-President Luis de Guindos has emphasized a ‘very prudent’ approach in light of current uncertainties, suggesting that further interest rate adjustments are not immediately necessary unless inflation expectations waver. Additionally, there is growing concern among ECB officials regarding the euro's rapid appreciation against the U.S. dollar, which may impact the competitiveness of exports from the Eurozone.
On the Indian side, the rupee has recently faced downward pressure, reaching a record low of 88.36 per U.S. dollar due to potential new tariffs imposed by the U.S. on Indian goods. These tariffs, along with significant foreign portfolio outflows, have contributed to a challenging environment for the rupee. However, recent forecasts from currency strategists suggest that further declines in the INR may be limited in the near term, with predictions indicating stabilization around 88.00 over the coming year.
The oil market also plays a critical role in influencing both currencies. With oil prices trading at 67.44 USD per barrel, which is 1.6% below the three-month average, fluctuations in oil prices could impact inflation and energy costs, subsequently affecting both the euro and the rupee.
In summary, while the euro demonstrates stability owing to a supportive monetary policy stance and increasing global interest, the Indian rupee remains under pressure from external tariffs and investment outflows. Market participants should remain vigilant of these developments as they could influence future EUR to INR exchange rates.
