EUR/PKR Outlook:
The outlook for EUR/PKR is slightly weaker, but likely to move sideways, as the rate is near recent lows and just above its 3-month average.
Key drivers:
- Rate gap: The European Central Bank is maintaining interest rates, while the State Bank of Pakistan is facing pressure due to high inflation and geopolitical tensions that diminish the PKR's value.
- Risk/commodities: Current oil prices are significantly above average, which can affect the Eurozone’s economic stability and indirectly influence the EUR/PKR.
- Macro factor: Ongoing political instability and inflation in Pakistan have led to a notable depreciation of the PKR, impacting its strength against the euro.
Range:
EUR/PKR is expected to hold within its recent range, showing limited movement as both currencies face unique challenges.
What could change it:
- Upside risk: Stronger-than-expected economic data from the Eurozone could boost the euro.
- Downside risk: Further deterioration of geopolitical conditions in Pakistan could exacerbate the PKR's decline.