EUR/SAR Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driving factor.
Key drivers:
• Rate gap: The European Central Bank's neutral stance contrasts with the Saudi Arabian monetary policy pegged to the U.S. dollar, creating a limited yield differential.
• Risk/commodities: Oil prices are slightly higher, which supports the Saudi Riyal's value; however, crude's volatility could introduce uncertainty for the Euro.
• One macro factor: The Eurozone's inflation is projected to decrease, which may create stable conditions for the euro if economic growth remains steady.
Range: The EUR/SAR rate is likely to hold steady within its recent range, given current trends and stability.
What could change it:
• Upside risk: Improved economic data from Germany could strengthen the euro further.
• Downside risk: An escalation in geopolitical tensions related to the Ukraine war could pressure the euro lower.
