The SAR to EUR exchange rate has a bearish bias in the near term. Key drivers include the interest rate differential, where the European Central Bank is cautious about further rate increases, aiming to avoid a stronger euro that may dampen inflation. Ongoing geopolitical tensions, particularly from the war in Ukraine, continue to create economic uncertainty for the Eurozone.
Current sentiment around oil prices also plays a role, with crude oil trading at seven-day lows; lower oil prices can weigh on the euro, especially given the Eurozone’s reliance on energy imports. Overall, SAR to EUR has traded within a stable range, only slightly below its three-month average.
Upside risks could arise from improved economic indicators in Europe that may boost the euro’s strength, while further exacerbation of geopolitical tensions could lead to a downward adjustment in the euro's value against the SAR.
