The EUR to INR exchange rate remains influenced by a mix of geopolitical developments, monetary policy shifts, and economic performance indicators in both the Eurozone and India. Currently trading at 102.7, the euro is just below its three-month average, remaining within a stable range of 101.8 to 104.9.
Recent analysis highlights the euro's slight appreciation, buoyed by renewed hopes for peace in Ukraine, despite recent indications of economic stagnation in Germany. A stalling economy, particularly in the Eurozone's largest member state, presents a potential headwind for the euro. As the European Central Bank (ECB) transitions to a more dovish monetary policy, with expectations to reduce interest rates from 4.0% to 3.5% by late 2025, analysts suggest that the euro’s strength may waver. This anticipated rate cut could diminish the currency's appeal compared to higher-yielding currencies.
The approval of Bulgaria's accession to the Eurozone, effective January 2026, is expected to positively influence the euro's circulation and value. Additionally, the euro has strengthened against the US dollar over recent months, reflecting ongoing investor confidence in the eurozone despite economic challenges.
Conversely, the Indian rupee (INR) is facing significant downward pressure, having recently hit a historic low against the US dollar. Factors contributing to this decline include increased H-1B visa fees impacting foreign inflows, weak manufacturing exports, and persistent importer demand for dollars. The Reserve Bank of India’s recent interventions indicate efforts to stabilize the rupee, although these actions may not fully counteract broader economic pressures.
Overall, the INR's performance is strained by a narrowing policy rate differential with the US, further complicating its outlook. With both currencies subject to external influences like oil price movements—currently trading at $63.37, below its average—forecasters advise monitoring these developments closely as they will continue to shape global exchange rates.
As the Eurozone navigates recovery efforts amid geopolitical tensions and domestic economic fluctuations, the EUR/INR exchange rate will remain sensitive to these evolving dynamics.
