The market bias for the INR to EUR exchange rate is currently bearish. Key drivers include: the interest rate differential, as the European Central Bank holds rates steady while the Indian Reserve Bank faces inflation pressures; recent concerns about a strong euro potentially stalling inflation in the Eurozone; and forecasts of a weakening INR, influenced by both fundamental risks and global dynamics.
The near-term trading range is expected to see fluctuations but remains relatively stable, keeping in mind recent volatility in both currencies. Potential upside risks could include positive macroeconomic developments in the Eurozone, while a downside risk might stem from ongoing geopolitical tensions or economic disruptions, which could further weaken the INR.
Currently, the INR trades approximately 1.7% below its three-month average against the euro, indicating a slight depreciation trend, while oil prices have recently dipped, influencing both currencies indirectly through economic implications.
