AED/OMR Outlook:
Likely to move sideways, as the rate is near its recent average and currently trading at 7-day lows.
Key drivers:
• Rate gap: The UAE Dirham's peg to the US Dollar maintains stability compared to the Omani Rial, which is influenced by different monetary policies.
• Risk/commodities: Oil prices are trading significantly above their recent average, which supports the Omani economy and could impact the OMR's strength.
• One macro factor: Recent fluctuations in oil prices, experiencing volatility, affect the economic outlook of both the UAE and Oman, influencing exchange rates.
Range:
The AED/OMR is likely to trade within its recent range, moving sideways without clear momentum.
What could change it:
• Upside risk: A significant increase in oil prices could bolster the Omani Rial, leading to a stronger exchange rate against the Dirham.
• Downside risk: If oil prices decline sharply, it may weaken the Omani economy and pressure the OMR lower relative to the AED.