The current market bias for the SAR to EUR exchange rate is range-bound.
Key drivers include the interest rate differential between the Saudi Arabian Monetary Authority (maintaining a peg to the US dollar) and the European Central Bank's data-driven approach to interest rates. The ongoing geopolitical conditions, particularly the Ukraine conflict, create uncertainty affecting the euro's stability. Meanwhile, the eurozone's projected GDP growth supports a stable outlook for the euro.
In near-term trading, the SAR to EUR exchange rate is expected to fluctuate in a narrow range, pending any significant developments.
An upside risk could emerge from improved economic stability in the Eurozone, particularly due to the increased fiscal measures and military spending, enhancing euro demand. Conversely, a downside risk may arise from volatility in global oil prices, as fluctuations that impact the Saudi economy could exert downward pressure on the riyal against the euro.