The recent forecasts and market updates for the EUR to INR exchange rate indicate a complex interplay of factors influencing both currencies. Analysts note that the euro (EUR) has encountered challenges due to the European Central Bank's (ECB) cautious approach towards interest rates and economic growth. Following the ECB's decision to maintain rates steady as of December 18, 2025, comments by ECB President Christine Lagarde cautioned that a stronger euro could hinder inflation control. As a result, the euro stumbled, reflecting concerns over its strength and the broader economic context, including geopolitical tensions and energy supply challenges exacerbated by the ongoing war in Ukraine.
The current EUR to INR rate stands at 105.7, which is 1.9% above its three-month average of 103.7, demonstrating moderate strength. This stability reflects a trading range of 4.9% over the last few months, with fluctuations between 101.8 and 106.8. However, the euro's outlook remains clouded by external pressures, including rising inflation in the Eurozone and political uncertainties, which could continue to weigh on the currency's performance.
On the Indian side, key factors impacting the Indian Rupee (INR) include significant trade deficits and a challenging current account imbalance. The widening trade deficit, driven by high import levels and slow export growth, combined with escalating US-India trade tensions, has placed downward pressure on the INR. Furthermore, there has been a remarkable increase in gold imports, further aggravating the INR’s vulnerabilities.
Recent movements in global oil prices have also contributed to currency dynamics, with Brent Crude OIL/USD currently at 60.89, about 3.9% below its three-month average of 63.35. The volatile oil market not only affects trade balances but also impacts inflation and purchasing power in both Europe and India.
In summary, while the euro maintains a slight edge over its three-month average against the INR, the currencies are subjected to a mix of internal economic conditions and external geopolitical events. Market participants should keep an eye on central bank decisions, trade policies, and global economic trends as they navigate these fluctuations in the EUR/INR exchange rate.
