The exchange rate forecast for the AED to MYR continues to reflect a complex interplay of regional and global economic factors. Recently, the AED has faced notable downward pressure, trading at 90-day lows near 1.1155, which is roughly 2% below its 3-month average of 1.1382. This decline is attributed to various developments in both the UAE and Malaysia.
In the UAE, a significant factor influencing the AED is the U.S. Federal Reserve's potential rate cuts, which are expected to soften the U.S. dollar and possibly enhance the appeal of Gulf markets, including the UAE. Positive economic growth projected for Abu Dhabi and Dubai, at 6.0% and 3.4% respectively, bolsters the outlook for the AED. However, despite these positive indicators, the Dirham’s performance against the MYR has recently weakened.
Conversely, the Malaysian Ringgit has shown resilience and strength, recently appreciating to a 13-month high. This is largely driven by robust growth projections for Malaysia's economy, particularly in exports and foreign direct investment, coupled with effective fiscal consolidation efforts by the Malaysian government. The MYR’s strength is also supported by positive outcomes from recent trade agreements established during the ASEAN Summit, enhancing investor confidence.
Furthermore, external factors such as oil prices have considerable implications for both currencies. Current oil prices have experienced a downturn, with WTI crude trading at 30-day lows near $61.20, which is 4.9% below its 3-month average of $64.38. Given that both the UAE and Malaysia are influenced by oil price fluctuations, this slide may limit potential gains for the AED.
In summary, the recent dynamics indicate a cautious outlook for the AED against the MYR as the Ringgit benefits from regional economic strength, while the Dirham faces challenges amid easing U.S. monetary policy expectations. Analysts suggest monitoring these trends closely, as shifts in oil prices and economic growth projections could further alter the exchange rate landscape in the coming months.
