The EUR to PKR market is currently range-bound.
Key drivers include:
- The European Central Bank's interest rate policy continues to play a crucial role, as it remains data-dependent to balance growth and inflation, directly influencing the Euro's strength.
- Recent signs of improved fiscal management and remittance inflows in Pakistan have given temporary support to the PKR against the dollar, affecting the EURPKR rate.
- Global trade uncertainties and geopolitical issues, particularly related to the war in Ukraine, continue to impact the Eurozone's economic outlook.
In the near-term, expect the EUR to PKR to trade within a stable range. Significant fluctuations are not likely over the next few months.
Upside risks include a potential resolution in Ukraine that could boost investor confidence in the Euro. Conversely, downside risks may arise from worsening economic forecasts for the Pakistani rupee as projected by Fitch Ratings, which expects gradual depreciation against the US dollar.