The market bias for the AED to HKD exchange rate is currently bullish, reflecting recent upward momentum. Key drivers include the interest rate differential, with the UAE Central Bank foreseeing robust economic growth, which may influence the AED positively. The stability of the HKD is supported by the Hong Kong Monetary Authority's consistent monetary policy stance, maintaining rates amid a low inflation environment.
Recent data indicates that the AED to HKD rate is trading near 90-day highs, with fluctuations within a narrow range. This suggests that the expected trading range over the next few months will likely remain stable as the market adjusts to ongoing economic developments.
Upside risks include stronger-than-expected growth in the UAE's non-hydrocarbon sectors, potentially improving AED demand. Conversely, a potential unwinding of speculative carry trades in Hong Kong could negatively influence the HKD, creating downward pressure on the exchange rate.