AED/QAR Outlook: Slightly positive, but likely to move sideways due to its position near the 90-day average and lack of clear drivers.
Key drivers:
• Rate gap: The stable peg of the Qatari Riyal to the US dollar provides consistent support against the UAE Dirham.
• Risk/commodities: Recent oil prices are above their average, which typically boosts the QAR due to Qatar's oil revenues, impacting the exchange rate positively.
• One macro factor: The introduction of the Digital Dirham aims to enhance the efficiency of transactions, which could bolster the AED's overall appeal in time.
Range: The AED/QAR is likely to hold steady within the recent 3-month range, given its current position.
What could change it:
• Upside risk: A significant rise in oil prices could further benefit the QAR.
• Downside risk: If the launch of the Digital Dirham faces delays or complications, it may weaken the AED.
