The recent trend for the EUR to QAR exchange rate indicates a bullish sentiment, with the euro currently trading at approximately 4.2762 QAR— marking 60-day highs and 0.8% above the three-month average of 4.2415 QAR. Analysts believe this upward movement is largely attributed to a combination of factors, including a weaker US dollar, which traditionally provides support for the euro, and ongoing developments regarding the European Central Bank's (ECB) policy direction.
The stronger euro has been fortified by expectations of a policy divergence between the ECB and the US Federal Reserve as inflation in the Eurozone shows signs of rising slightly above the ECB's target, sitting at 2.2% in November. This has led to increased speculation about the ECB maintaining its current interest rates or even considering hikes, especially in light of recent comments from ECB officials pointing to "upside surprises" in inflation trends. Thus, economists see potential for the euro to remain robust against the riyal, particularly if the ECB maintains a hawkish stance moving into 2026.
In contrast, the Qatari riyal has seen developments that contribute to its stability, including an increase in international reserves to 260 billion riyals and interest rate adjustments aimed at stimulating economic activity. With the Qatari economy bolstered by these measures, the riyal continues to maintain its peg to the US dollar. However, forecasts from the Qatar National Bank suggest a moderated outlook for the dollar, which is likely to influence the riyal's strength against other currencies, including the euro.
The global oil market also plays a pivotal role in shaping the dynamics of the EUR to QAR exchange rate. Currently, oil prices are trading at about 61.55 USD per barrel, which is 4.5% below the three-month average. Given the close ties between oil revenues and the Qatari economy, fluctuations in oil prices may impact the strength of the riyal if significant volatility persists.
Overall, the combination of supportive eurozone inflation readings, ECB policy expectations, and the stable economic environment in Qatar creates a landscape where the euro could exhibit further strength against the Qatari riyal in the near term, especially with monitored changes in oil prices and US dollar movements likely influencing future exchange rate trajectories.
