Bias: Range-bound, as the AED is near the 90-day average and within the middle of the 3-month range.
Key drivers:
• Rate gap: The UAE Dirham's monetary policy is closely aligned with the US Federal Reserve, which affects its value against the Omani rial.
• Risk/commodities: Oil prices are currently trading above the 3-month average, which can positively impact the Omani Rial due to its oil-exporting economy.
• One macro factor: Strong credit growth in the UAE signals a robust economic environment, which could support the Dirham.
Range: Expect the AED/OMR to hold within its recent 3-month range as traders adjust their positions.
What could change it:
• Upside risk: A significant rise in oil prices could strengthen the Omani Rial.
• Downside risk: Any unexpected shift in UAE monetary policy could negatively impact the Dirham.