AED/AUD Outlook:
The AED/AUD rate is currently below its recent average and near recent lows. Given the pressure from Australian economic factors, the outlook is slightly weaker, but likely to move sideways.
Key drivers:
- Rate gap: The UAE Central Bank's recent rate cut contrasts with Australia's potential for further monetary tightening, weighing on the AED.
- Risk/commodities: Volatile oil prices have created uncertainty, impacting the AUD, which depends on commodity demand, particularly from China.
- Macro factor: Strong Australian employment data initially boosted the AUD but tempered risk appetite has limited further gains.
Range:
Expect the AED/AUD to hold within its recent range, showing limited movement as it drifts on mixed signals.
What could change it:
- Upside risk: A sustained rebound in global risk appetite could favor the AUD and lift the AED/AUD rate.
- Downside risk: Further deterioration in Australian economic conditions or geopolitical tensions could pressure the AUD downwards.
