The current market bias for the AED to MYR exchange rate is bearish.
Key drivers include:
- The UAE's interest rates are expected to remain stable, while Malaysia anticipates narrowing interest rate differentials due to potential US rate cuts, benefiting the MYR.
- Malaysia's strong economic outlook, fueled by robust growth and fiscal reforms, supports a positive sentiment for the MYR.
- Rising oil prices may support Malaysian exports, as Malaysia is an oil producer, which could provide additional support for the MYR.
In the near term, the AED to MYR exchange rate is expected to trade within a range, pointing towards continued stability but subject to fluctuations.
An upside risk could stem from stronger-than-expected economic growth in the UAE, potentially bolstering the AED. Conversely, a downside risk exists if the global economy experiences a slowdown, which could weigh negatively on both currencies.