The exchange rate forecasts for the Euro to Pakistani Rupee (EUR/PKR) are influenced by recent economic developments in both the Eurozone and Pakistan. Currently, the EUR/PKR is trading near 332.8, marking a 30-day high and slightly exceeding its three-month average of 330. Analysts note that the rate has remained stable within a 4.5% range, with minimums around 321.6 and maximums at 336.0.
The Euro has exhibited a modest decline recently due to softer retail sales in the Eurozone, which reported a larger contraction in July than anticipated. Despite this, investors have shifted towards the Euro amid a risk-averse market environment, lending some support to the currency against riskier peers. According to forecasts, a potential recovery in German factory orders might provide slight upward momentum for the Euro, although expectations remain cautious.
Adding to the Euro's complex dynamic is the European Central Bank's (ECB) concern over the currency's rapid appreciation, notably its 14% gain against the USD in 2025. ECB Vice-President Luis de Guindos indicated that while levels around $1.18 are manageable, rates exceeding $1.20 could become detrimental to the Eurozone's export competitiveness. The combination of a strong Euro and new U.S. tariffs on European goods poses additional challenges for exporters, highlighting the delicate balance the ECB must maintain.
On the Pakistani side, recent developments include predictions of a 50 basis point cut in the central bank's interest rate, reflecting easing inflation. The government’s fiscal projections indicate expectations for a depreciation of the PKR against the dollar, with the exchange rate anticipated at Rs290 in the upcoming fiscal year. Geopolitical tensions with India and a crackdown on black market dollar trading further complicate the PKR's outlook. These factors, paired with fresh trade agreements with the U.S., may stimulate some support for the currency.
Additionally, oil prices, which tend to influence both the Euro and the PKR due to their effects on trade balances and inflation, are currently at 90-day lows around $65.50, significantly trailing their recent average. This decline could impact energy-dependent economies and affect the broader market sentiment surrounding these currencies. As the situation evolves, close monitoring of economic indicators and geopolitical developments will be critical for assessing future exchange rate movements between the Euro and the Pakistani Rupee.
