The Euro to Indian Rupee (EUR/INR) exchange rate softened by around -0.15% on Friday morning.
Although fears regarding a Greek exit from the Eurozone eased after Prime Minister Alexis Tsipras reassured creditors Athens would continue with its bailout program, the Euro softened versus many of its major peers. The declination is as a result of renewed focus on quantitative easing, with many experts speculating that it will widen the gap between large and small economies in the Eurozone.
The Indian Rupee, meanwhile, strengthened versus many of its most traded currency competitors despite divided opinion about the effectiveness of the recent Reserve Bank of India (RBI) rate cut. The appreciation can be attributed to falling crude prices amid oversupply in the US.
The Euro to Indian Rupee (EUR/INR) exchange rate is currently trending in the region of 66.3610.
Euro (EUR) Exchange Rate Softens with QE in Focus
With trader focus moving towards quantitative easing after Grexit tensions eased, the single currency resumed a downtrend after two consecutive days of appreciation. Many experts are staring to question the viability of the program, with speculation rife that liquidity will boost large economies whilst promoting complacency among laggards.
‘In Germany, you have a situation where we’re moving towards over-potential,’ an adviser to the Berlin government said. ‘But we’re in the monetary union, so there is one (monetary) policy.’
‘While the central scenario is that QE should help on inflation and on (economic) activity, it’s difficult to pinpoint exactly what the effect should be,’ said Francesco Papadia, a former ECB director general for market operations.
The Euro to Indian Rupee (EUR/INR) exchange rate dropped to a low today of 66.2010.
Indian Rupee (INR) Exchange Rate Strengthens as Trade Deficit Narrows
Indian economic data printed positively on Friday which caused the Rupee to strengthen versus many of its major counterparts. Foreign Reserves was relatively unchanged having only fallen from $338.08 billion to $337.79 billion. Trade Balance improved in February, however, advancing from $-8.32 billion to $06.8 billion.
Compounding the Rupee uptrend is rapidly falling crude prices amid oversupply in the US. ‘Stocks may soon test storage capacity limits,’ said the Paris-based adviser (IEA) to 29 nations in its monthly market report. ‘That would inevitably lead to renewed price weakness, which in turn could trigger the supply cuts that have so far remained elusive.’
Euro to Indian Rupee (EUR/INR) Exchange Rate Forecast to Trend Lower
Given the lack of domestic data to drive changes, and with oil prices showing little sign of recovery, the Euro to Indian Rupee (EUR/INR) exchange rate is likely to continue trending lower over the course of Friday. Divided opinions regarding the effectiveness of QE is also likely to continue to weigh on the single currency.
The Euro to Indian Rupee (EUR/INR) exchange rate climbed to a high of 66.7520 today.