The EUR to PKR exchange rate is currently range-bound.
Key drivers include the interest rate differential between the European Central Bank (ECB) and the State Bank of Pakistan, with the ECB maintaining a cautious stance on interest rates to prevent a stronger euro from lowering inflation. The PKR has shown signs of strength, reflecting improved confidence in the Pakistani economy, while inflationary pressures remain a concern for both currencies. Additionally, the upcoming adoption of the euro by Bulgaria could enhance regional economic stability and support the euro’s valuation.
In the near term, the EUR to PKR exchange rate is expected to trade within a stable range. Recent data shows the EUR is just above its three-month average, indicating limited volatility.
An upside risk for the euro could arise from unexpected improvements in eurozone economic data, which might bolster the currency. Conversely, forecasts from Fitch Ratings suggesting gradual depreciation of the PKR could put downward pressure on the euro if market sentiment shifts rapidly.
