The EUR/INR exchange rate is currently in a bearish bias as the euro faces downward pressure.
Key drivers include the interest rate differential, with the European Central Bank keeping rates unchanged despite an improved growth outlook, which diminishes the euro’s appeal. Additionally, geopolitical tensions, particularly the ongoing war in Ukraine, continue to impact the euro’s stability. Coupled with India’s projected economic growth and inflation control measures, the INR remains relatively strong.
The near-term trading range for EUR/INR is expected to remain stable but could see fluctuations. Significant recent moves show the rate currently at 105.6, which is 1.7% above its 3-month average of 103.8.
Upside risks may arise from potential stabilization of geopolitical tensions, improving euro sentiment. On the downside, further depreciation of the euro could occur if energy prices rise sharply, impacting inflation and economic outlook.