The exchange rate forecast for the AED to MYR reflects significant volatility driven by both geopolitical factors and economic conditions in their respective regions. Analysts have noted that the recent imposition of a 24% tariff by the U.S. on Malaysian imports creates a challenging backdrop for the Malaysian Ringgit. This development has contributed to a generally negative outlook for emerging Asian currencies, with analysts indicating a drop in regional risk appetite as a result of these tariff escalations. The MYR has seen downward pressure, following the broader trend affecting currencies like the Thai baht and South Korean won, which both reported declines of around 2%.
In contrast, the United Arab Emirates Dirham has shown relative strength, recently trading at 30-day highs near 1.1646 against the MYR, which is about 0.7% above its three-month average of 1.1569. The stable trading range of the AED to MYR, which has fluctuated from 1.1428 to 1.1812, suggests some resilience amid the turmoil affecting the MYR.
Furthermore, the dynamics of oil prices play a crucial role in shaping the exchange rate. With oil priced at 69.67 USD—2.5% above its three-month average—this price strength impacts the Malaysian economy significantly, as it is a key exporter of oil. Increased oil prices could potentially buoy the MYR if sustained; however, the uncertain global trade environment presents additional risks.
For the AED, predictions remain optimistic, particularly with recent economic growth forecasts from the Arab Monetary Fund suggesting a 6.2% expansion in the UAE's economy by 2025. This growth is expected to be supported by advancements in tourism, real estate, and efforts to secure favorable trade agreements with the U.S. that could mitigate tariff impacts.
Overall, while the AED appears well-positioned in the current climate, those dealing with MYR should remain cautious about ongoing geopolitical developments and their potential impacts on capital flows and currency valuations.