Bias: Range-bound, consistent with the current level being near the 90-day average and positioned in the middle of the 3-month range.
Key drivers:
• Rate gap: The UAE's central bank aligns its rates with the US Federal Reserve, which supports the Dirham's stability against the Fijian dollar.
• Risk/commodities: Oil prices have been fluctuating around average levels, impacting currency flows and risk outlook, particularly benefiting commodity-linked currencies like the FJD.
• One macro factor: The anticipated upcoming general election in Fiji could create uncertainty in economic policies, affecting the Fijian Dollar's performance.
Range: The AED/FJD exchange rate is expected to drift within the recent 3-month range, reflecting stability despite external factors.
What could change it:
• Upside risk: A significant rise in oil prices could bolster FJD as it enhances export revenues.
• Downside risk: Any political instability following the Fijian election could negatively impact the FJD.