AED/AUD Outlook: Likely to decrease, as the rate is below its recent average and near recent lows, driven by persistent economic pressures.
Key drivers:
• Central banks: The UAE Dirham remains pegged to the US Dollar, while the Reserve Bank of Australia is signaling potential interest rate hikes, creating a widening gap between monetary policies.
• Commodities: The Australian dollar's strength is supported by high metals prices and a resilient economy, which contrasts with the steady nature of the Dirham.
• Economic indicators: Weaker demand for Australian exports, especially iron ore, due to China's uneven recovery, poses risks to the AUD’s performance.
Range: The AED/AUD rate is likely to drift within its recent range, as current pressures may keep it near short-term lows.
What could change it:
• Upside risk: A significant improvement in Australian export demand or stronger economic data could boost the AUD.
• Downside risk: Renewed geopolitical tensions or further weak performance from China could exacerbate the current bearish trend for the AED against the AUD.
