The market bias for the EUR to INR exchange rate is currently bearish.
Key drivers include:
- Interest rates are expected to remain stable, as the European Central Bank balances between controlling inflation and supporting growth within the Eurozone.
- The current economic outlook for the Eurozone suggests growth will support the euro's value, although geopolitical tensions and ongoing sanctions related to the Ukraine conflict create uncertainty.
- The Indian rupee is anticipated to weaken against the US dollar, which may negatively influence the INR and, consequently, the EUR/INR pair.
In the near term, the EUR to INR exchange rate is expected to fluctuate within a stable range, with lower volatility suggested by recent trading patterns.
Upside risks include potential improvements from a US-India trade deal that could support the INR. Conversely, downside risks stem from increased global geopolitical tensions, which could further destabilize the euro.