The INR to EUR exchange rate has been influenced by recent economic data and geopolitical developments, as well as trends in oil prices, which are crucial for both currencies. Currently, the INR is trading at 90-day lows of approximately 0.009706 to the euro, which is 2.5% below its three-month average of 0.009952. This relatively stable range has been constrained between 0.009706 and 0.010299.
The euro has faced downward pressure due to disappointing consumer confidence data from Germany, the Eurozone's largest economy. Analysts have pointed out that this deterioration in consumer sentiment has exacerbated the euro's challenges, especially as the currency maintains a strong negative correlation with the rising US dollar. Expectations surrounding the European Central Bank's upcoming policy minutes could create volatility for the euro, especially if a hawkish tone is revealed, which may support its value.
On the INR side, the currency has weakened recently, driven primarily by increased dollar purchases from oil-importing companies as global oil prices fluctuate. The latest data indicates that crude oil traded at about $68.12, which is 1.1% below the three-month average, experiencing a notable 25.6% range of volatility. Rising oil prices typically exert pressure on the INR, given India's reliance on oil imports.
Positive developments for the INR include ongoing foreign bank dollar sales that have offered some support against the dollar, even as geopolitical concerns such as proposed U.S. tariffs on Indian goods could further pressure the currency. Additionally, plans for tax cuts aimed at stimulating domestic consumption create a mixed outlook, with potential short-term support for the INR.
Overall, analysts remain cautious but acknowledge the current economic indicators and geopolitical factors surrounding both currencies. Any trajectory changes will largely depend on ECB policy directions, the performance of the Indian economy relative to oil prices, and broader market sentiment influenced by geopolitical developments. Traders should stay alert to upcoming economic data releases and central bank announcements that could impact the INR to EUR exchange rate.
