AED/CAD Outlook:
Slightly weaker, but likely to move sideways, as the rate is below its recent average and near the mid-range of the last three months.
Key drivers:
- Rate gap: The UAE Dirham’s peg to the US Dollar ensures stability, while the Bank of Canada is cautious with interest rate adjustments.
- Risk/commodities: Oil prices are currently fluctuating but are above their recent average, putting some support on the CAD.
- One macro factor: Ongoing US-Canada tensions have generated uncertainty, affecting the Canadian Dollar's value amidst rising geopolitical risks.
Range:
Expect the AED/CAD to hold steady within its recent 3-month range, as current influences lack strong momentum in either direction.
What could change it:
- Upside risk: A significant increase in oil prices could bolster the CAD and strengthen its appeal.
- Downside risk: Further deterioration in US-Canada trade relations could weigh heavily on the CAD.