AED/FJD Outlook:
The AED/FJD exchange rate remains slightly weaker and is likely to move sideways as it is currently below its recent average and near recent lows. Despite being stable, the Dirham's strength is not enough to drive a clear upward movement.
Key drivers:
- Rate gap: The UAE Central Bank's lower rate supports the AED's stability, while Fiji's economic growth does not strongly influence the FJD.
- Risk/commodities: Oil prices remain fluctuating around average levels, which could impact both currencies due to their correlations with energy markets.
- One macro factor: Fiji's forecasted economic growth of 3% for 2026 could benefit the FJD, but inflation remains low at around 2.5%.
Range:
The rate is likely to hold within its recent range of 0.5951 to 0.6240 without testing extremes shortly.
What could change it:
- Upside risk: A significant drop in oil prices could weaken the AED, enhancing the FJD's appeal.
- Downside risk: Political instability in Fiji ahead of elections could negatively impact the FJD's strength.