The EUR to PKR exchange rate has recently reached 60-day highs near 329.5, reflecting a 0.5% increase above its three-month average of 327.8. Analysts have noted this stability in the EUR/PKR pair, which has traded within a narrow range of 323.3 to 334.1. This movement can be linked to several key developments impacting both currencies.
The European Central Bank (ECB) has maintained interest rates steady, citing modest economic growth across the Eurozone. However, ECB President Christine Lagarde's caution about a stronger euro potentially dampening inflation has introduced a bearish sentiment for the euro. This cautious stance, paired with ongoing geopolitical tensions and economic uncertainties, continues to weigh on the euro’s performance.
On the other side, the Pakistani rupee (PKR) has faced pressure due to significant geopolitical tensions leading to a 12% depreciation against the US dollar since the start of 2025. Analysts anticipate further declines, projecting the PKR could reach 100 PKR/USD by year-end. The State Bank of Pakistan has intervened in the currency markets, buying substantial amounts of US dollars to support the PKR, yet challenges remain due to high inflation and trade deficits.
The fluctuating global oil prices also contribute to this dynamic. Currently, oil prices are at 7-day highs near 62.03, which is 2.6% below the three-month average. Since the PKR's stability is heavily influenced by oil import costs, any significant movements in oil prices will likely affect the exchange rate further.
As geopolitical stability fluctuates and the ECB navigates its policy strategies, both analysts and market participants will need to closely monitor these factors. The euro's strength against the PKR may hinge on the outcome of upcoming economic data from the Eurozone and the ongoing situation in Pakistan, particularly regarding fiscal and political stability, as well as the broader geopolitical landscape.
