AED/FJD Outlook: Likely to decrease, as the rate is below its recent average and near recent lows, pressured by current market conditions.
Key drivers:
- Rate gap: The UAE Dirham's stability from its peg to the US Dollar contrasts with the Fijian Dollar's more volatile positioning.
- Risk/commodities: The recent decline in oil prices has created headwinds for emerging currencies like the FJD, influencing its ability to strengthen against the AED.
- One macro factor: Fiji's revised economic growth forecast for 2025 suggests improvement, but upcoming elections may bring uncertainty, impacting investor confidence.
Range: The AED/FJD exchange rate is likely to drift within its recent range, facing resistance from the current low position.
What could change it:
- Upside risk: An increase in global oil prices could enhance demand for the FJD, benefiting the exchange rate.
- Downside risk: A destabilizing event linked to the upcoming election in Fiji could weaken the FJD further against the AED.