The market bias for the EUR to SAR exchange rate is currently bearish, with the euro facing pressure amid a stable Saudi riyal.
Key drivers include interest rate differentials, as the European Central Bank maintains a flexible policy stance, potentially keeping rates lower compared to the fixed nature of the Saudi riyal's peg to the US dollar. Global risk sentiment, driven by geopolitical factors and economic data, influences both currencies but particularly weighs on the euro. Additionally, rising oil prices, recently peaking at around 62.09, may also support the riyal due to Saudi Arabia's oil dependency.
The near-term trading range for EUR to SAR is expected to remain within a stable corridor, reflecting recent movements around 4.38, just above its three-month average.
Upside risks include solid economic growth in the Eurozone, which could bolster the euro. Conversely, significant geopolitical tensions or worsening economic data from Europe could lead to further downward pressure on the euro against the riyal.
