The EUR to PKR exchange rate has seen recent fluctuations influenced by various geopolitical and economic factors. Currently, EUR trades at 326.5 PKR, just 0.6% below its three-month average of 328.6 PKR, indicating a relatively stable trading range of 3.8% from 323.3 to 335.7 PKR.
Analysts highlight that the euro temporarily strengthened against the US dollar due to a weaker USD. However, worries surrounding the ongoing tensions between Europe and Russia, as well as a potential slowdown in German factory orders, have introduced downward pressure on the euro. The European Central Bank (ECB) has maintained its commitment to market-determined exchange rates and emphasized stability as inflation in the Eurozone slightly increased to 2.2%, above the ECB's target. This inflation surge, alongside expectations of steady ECB policies, indicates that the euro may continue to oscillate in response to macroeconomic indicators and geopolitical developments.
Conversely, the Pakistani rupee continues to grapple with significant external pressures. Geopolitical tensions have contributed to a 12% depreciation against the US dollar since the beginning of the year, with forecasts suggesting a decline to 100 PKR/USD by year-end. The State Bank of Pakistan has intervened in the foreign exchange market, purchasing substantial dollars to support the rupee. Though these measures have provided some artificial demand, the underlying political and economic instability could maintain downward pressure on PKR.
Price movements in crude oil may also impact both currencies indirectly, as they have been under observation. Oil prices recently traded near 63.75 USD, slightly below their three-month average, reflecting volatility in the market. Given that high oil prices could influence the Eurozone’s economic recovery and indirectly affect inflation, shifts in oil price trends might have ripple effects on the EUR, especially through energy market channels.
Moving forward, analysts suggest that the euro's trajectory will largely depend on ECB monetary policy and economic recovery within the Eurozone, while the PKR's performance will be dictated by ongoing geopolitical developments and the effectiveness of government interventions. The interplay of these factors will continue to shape the EUR to PKR exchange rate, highlighting the need for close monitoring of both the Eurozone's economic stability and Pakistan's geopolitical landscape.
