AED/FJD Outlook:
Slightly weaker, but likely to move sideways, as the rate is below its recent average and lacks a clear driver for significant movement.
Key drivers:
• Rate gap: The UAE Central Bank's policies provide stability for the AED compared to the Fiji's current focus on economic support through low interest rates.
• Risk/commodities: Recent declines in global oil prices may pressure the AED due to its link to oil revenues, while the FJD has shown strength against major currencies.
• One macro factor: The IMF's projection that Fiji's economic growth will slow could negatively impact the FJD's strength moving forward.
Range:
The AED/FJD pair is likely to remain in a stable position within the recent 3-month range.
What could change it:
• Upside risk: A recovery in global oil prices could strengthen the AED against the FJD.
• Downside risk: Renewed global trade tensions may weaken the FJD, impacting its export-driven economy.