EUR/QAR Outlook: Slightly positive, but likely to move sideways as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The European Central Bank is maintaining a neutral monetary policy, contrasting with Qatar's steady approach to interest rates, which is supported by its exchange rate peg to the US dollar.
• Risk/commodities: Oil prices are trending above average, which tends to bolster the Qatari Riyal, given Qatar's economic reliance on hydrocarbon revenues.
• One macro factor: Qatar's GDP growth is projected to rise next year, enhancing its economic outlook, while Eurozone inflation is expected to decline, indicating a more complex environment for the Euro.
Range: The EUR/QAR is likely to hold within its recent range, given current trading patterns.
What could change it:
• Upside risk: A shift in ECB policy towards tightening could strengthen the Euro.
• Downside risk: Prolonged geopolitical tensions affecting the Eurozone may weaken the Euro further.