AED/PKR Outlook: Slightly weaker, but likely to move sideways, as the rate is below its three-month average and near recent lows.
Key drivers:
- Rate gap: The Central Bank of the UAE maintains its peg to the US Dollar, supporting the AED, while the PKR faces signs of a gradual depreciation against the USD due to economic pressures.
- Risk/commodities: Recent stability in global oil prices may provide some support to the PKR, but overall volatility could affect its strength against the AED.
- One macro factor: Inflation in Pakistan is expected to average modestly and could impact consumer spending, affecting the PKR's performance.
Range: The AED/PKR is likely to drift within its recent stable range, showing little movement in the short term.
What could change it:
- Upside risk: A significant improvement in the PKR's economic indicators could strengthen its position against the AED.
- Downside risk: Continued inflation or instability in global commodity prices could pressure the PKR further.