AED/CAD Outlook: Slightly weaker, but likely to move sideways as the rate is below its recent average and lacks a clear driver for movement.
Key drivers:
• Rate gap: The Bank of Canada maintains its interest rate, which supports the CAD, while the UAE's steady policies keep the AED stable against it.
• Risk/commodities: Rising oil prices are supporting the CAD, with recent gains well above average, enhancing Canada's export revenue and attractiveness.
• One macro factor: Canada’s recent trade agreement with China may provide a boost to its economy and strengthen the CAD over time.
Range: The AED/CAD is likely to drift within its recent range as factors affecting both currencies offset one another.
What could change it:
• Upside risk: A continued rise in oil prices could lead to increased CAD strength, pushing the AED/CAD higher.
• Downside risk: A significant downturn in global oil prices could weaken the CAD, leading to a drop in the AED/CAD rate.