The recent exchange rate forecasts for the SAR to EUR pair indicate a relatively stable range with the SAR trading at approximately 0.2294 EUR, just above its three-month average. The exchange rate has been confined within a stable 3.4% range between 0.2246 and 0.2323. This stability in the riyal can be attributed to its fixed peg to the US dollar, which remains at 3.75 SAR per USD, and reflects ongoing confidence in the Saudi economy amidst fluctuations in global oil prices.
Meanwhile, the euro has shown some resilience, gaining value against the USD in response to complex factors including the European Central Bank's (ECB) recent monetary policy shifts. Although the ECB raised interest rates to combat inflation, it is now anticipated to adopt a more dovish approach, potentially lowering rates to 3.5% by late 2025. This change in stance may narrow the interest rate differential with the US Federal Reserve, contributing to euro volatility.
Analysts have observed that the euro's appreciation is significantly influenced by geopolitical tensions and macroeconomic conditions within the Eurozone, particularly the ongoing conflict in Ukraine, which has impacted energy supplies and economic growth. Future projections remain cautious, as stability in the euro's value will hinge on ECB decisions, the economic performance of key member states, and the region’s ability to navigate geopolitical challenges effectively.
The recent price of Brent Crude oil, trading at 64.29 USD, also plays a role in the broader economic context affecting the euro. The volatility in oil prices can indirectly influence the euro through shifts in global economic sentiment and trade balances. With oil prices varying 15% from 60.96 to 70.13 USD, fluctuations may continue to affect the Eurozone's economic recovery.
In summary, while the SAR remains stable due to its peg to the US dollar, the euro's trajectory appears more complex and influenced by both internal and external pressures. Market watchers and businesses engaged in international transactions may benefit from monitoring these developments closely, as they could lead to potential shifts in the SAR to EUR exchange rate in the upcoming months.
