AED/FJD Outlook: Slightly weaker, but likely to move sideways, consistent with its position below the 90-day average and near recent lows.
Key drivers:
• Rate gap: The UAE Dirham benefits from a stable monetary policy, whereas the Fijian Dollar's performance may be pressured by local economic challenges.
• Risk/commodities: Recent fluctuations in global oil prices could impact tourism growth in Fiji, which significantly influences the FJD.
• One macro factor: The introduction of new polymer banknotes by Fiji may enhance transactional security but could create short-term volatility.
Range: The AED/FJD is expected to hold within its recent range, with limited movement as it trades below the average and near recent lows.
What could change it:
• Upside risk: A positive surprise in UAE economic developments could strengthen the Dirham against the FJD.
• Downside risk: Weaker-than-expected tourism performance in Fiji could hurt the FJD and increase volatility.