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 projecting economic growth, cautioning against a strong euro due to its potential impact on inflation. The Indian economy's resilience is highlighted by recent forecasts suggesting growth, though the rupee may face downward pressure with predictions of depreciation against the US dollar.
Recent data shows EUR to INR is approximately 7-day highs, trading above its 3-month average, reflecting positive short-term sentiment. However, the weak oil prices might be adding a layer of uncertainty, as oil has traded more than 3% below its average in recent months.
An upside risk could emerge if Europe experiences stronger-than-expected economic indicators, boosting the euro, while a downside risk exists if the Indian rupee weakens further against the US dollar, influencing overall EUR to INR performance.
