The recent forecasts for the INR to EUR exchange rate highlight a challenging environment for the Indian Rupee (INR) as it has reached a historic low against the US dollar, impacting its value against other currencies like the euro (EUR). As of early December 2025, the INR is trading at around 90.42 per USD, reflecting a 5% depreciation over the past year. The widening trade deficit, influenced by high tariffs on Indian exports and significant foreign investment outflows, has further put pressure on the rupee. Analysts predict that without a rapid resolution to US trade relations, the INR might weaken further, with some estimates projecting a drop to 92 against the USD.
On the other hand, the euro has been supported by a weaker US dollar and relative strength in the Eurozone, buoyed by inflation trends that slightly surpassed expectations. The European Central Bank (ECB) has reiterated its commitment to not target exchange rates while maintaining a vigilant stance around inflation, which has ticked up to 2.2%. This slight increase, amid broader market stability, reflects the ECB's continued focus on keeping inflation within target limits, supporting the euro's position.
Recent market movements show the INR to EUR exchange rate has dipped to 90-day lows near 0.009404, which is 2.8% below its three-month average. This instability suggests that the rupee's depreciation against the euro is driven by underlying economic pressures rather than a direct correlation with euro movements. The EUR's fate in the coming months will largely depend on ECB policy decisions, inflation trends, and broader geopolitical factors affecting the Eurozone.
Additionally, fluctuations in the price of Brent Crude oil could influence both currencies, particularly given that EUR valuations are sensitive to macroeconomic indicators including energy prices. The recent trend in oil prices has shown volatility, with the price of Brent Crude oil at 30-day lows around 61.20 USD, significantly below its three-month average of 64.38 USD. This decline in oil prices could affect inflation and economic growth dynamics in both regions, thus indirectly influencing the INR/EUR exchange rate.
In summary, the INR faces significant headwinds due to its weakened state against the dollar and consequent implications for the euro. Analysts suggest that sustained attention will be required on both economic indicators and geopolitical developments in the Eurozone and India to better navigate the currency market landscape going forward.
