AED/FJD Outlook:
Bearish, influenced by the rate's position below its recent average and near its recent lows.
Key drivers:
• Rate gap: The UAE Dirham's stability is supported by a fixed exchange rate to the US Dollar, whereas the Fijian Dollar operates with more volatility due to external economic influences.
• Risk/commodities: Recent declines in global oil prices suggest less support for the UAE's economic fundamentals, potentially impacting the Dirham's performance.
• One macro factor: The IMF's projection of slower economic growth for Fiji highlights potential challenges, but the currency's recent strength against the USD offers some resilience.
Range:
The AED/FJD pair is likely to drift within its recent range, but may face downward pressure.
What could change it:
• Upside risk: A significant increase in oil prices could bolster the AED, providing stronger support against the FJD.
• Downside risk: Escalating global trade tensions could adversely affect Fiji's economy and further weaken the FJD against the AED.