SAR/EUR Outlook: Likely to decrease, as the rate is near recent lows and below the 90-day average, reflecting a lack of strong support for the riyal.
Key drivers:
• The Saudi riyal is firmly pegged to the US dollar, which provides stability but limits its fluctuations against the Euro, especially as the euro faces pressure.
• Oil prices are currently high, which typically supports the riyal; however, the volatility in oil markets may keep broader market trends uncertain.
• Eurozone inflation is progressing downward, and the European Central Bank is expected to maintain a steady policy stance, which could weaken demand for the euro.
Range: The SAR/EUR pair is likely to drift within its recent range as it struggles to find upward momentum.
What could change it:
• A significant rise in oil prices could bolster the riyal's value against the Euro.
• Any escalation of geopolitical tensions affecting energy supplies could highlight currency fluctuations and negatively impact the riyal.