Recent developments in the geopolitical landscape, particularly the tensions following Israel's military strikes on Iran, have contributed to a decline in UAE markets. This situation has resulted in increased oil prices and heightened market volatility, which could exert pressure on the UAE Dirham (AED) in the short term.
Despite these tensions, the Arab Monetary Fund forecasts robust economic growth for the UAE at 6.2% in 2025, underscored by anticipated improvements in tourism, real estate, and international trade. Nevertheless, the recent slowdown in the UAE's non-oil private sector growth could signal challenges in diversifying the economy, which may weigh on the currency's stability.
Additional factors, such as ongoing trade negotiations with the U.S. aimed at reducing tariffs on steel and aluminum exports, could also influence the AED’s value. Positive developments in this area might enhance trade balances, offering potential support to the AED.
On the other hand, recent forecasts for the Fijian Dollar (FJD) indicate positive growth in the tourism sector. With predictions of up to a million tourists visiting Fiji by the end of 2024 and expectations for the tourism industry to grow into a $FJ3 billion market, these developments could bolster the FJD. Investments in resorts and hotels are expected to rise in response to this increased demand.
The latest AED to FJD exchange rate data reflect some stability, with the rate approaching 14-day highs at approximately 0.6154, just slightly below the three-month average of 0.6192. The exchange rate has traded within a stable range of 4.8%, between 0.6097 and 0.6388, indicating relative steadiness despite external pressures.
As analysts observe these trends, fluctuations in the AED performance relative to the FJD may be influenced by the interplay of geopolitical factors, economic growth forecasts, and tourism developments. Businesses and individuals engaging in currency conversion should remain vigilant about these dynamics, as they may affect transaction costs and overall currency valuations in the near term.