The AED to EUR exchange rate is currently range-bound.
Key drivers include:
- The European Central Bank is maintaining a flexible approach to interest rates, balancing inflation and growth, which directly impacts the euro's value.
- Upcoming GDP growth projections for both the Eurozone and the UAE indicate solid economic performance, supporting both currencies.
- Oil prices are at 30-day highs, which can influence the AED due to the UAE's reliance on oil revenues, potentially boosting the dirham's strength.
Near-term, the exchange rate is expected to trade within a stable range, reflecting recent patterns.
An upside risk could arise from stronger-than-expected economic data or an accelerated digital currency rollout in the UAE, reinforcing confidence in the dirham. Conversely, a downside risk may stem from geopolitical tensions in Europe affecting the euro's stability, or sharp declines in oil prices influencing the AED negatively.