EUR/SAR Outlook:
The EUR/SAR rate is currently slightly positive, trading above its recent average and showing stability within its recent range. The euro's recent strength against the dollar supports its value against the riyal.
Key drivers:
- Rate gap: The European Central Bank's focus on managing inflation, contrasted with the fixed nature of the Saudi riyal, creates a favorable environment for the euro.
- Risk/commodities: Oil prices have climbed significantly above their recent average, which typically supports the Saudi economy and riyal, influencing overall currency dynamics.
- One macro factor: Germany's latest IFO business climate index could positively impact the euro if it reflects improved business morale.
Range:
Expect the EUR/SAR to hold within its established recent range, with potential for slight upward movement based on eurozone economic data.
What could change it:
- Upside risk: A stronger-than-expected IFO index could boost demand for the euro.
- Downside risk: A significant drop in oil prices might weaken support for the Saudi riyal, indirectly affecting the EUR/SAR.