The AED to QAR exchange rate exhibits a bearish bias as it hovers near recent lows.
Key drivers include the interest rate differential, with Qatar reducing its rates while the UAE maintains a steady policy. The ongoing growth in the UAE's non-hydrocarbon sectors supports the AED, while Qatar's LNG production expansion may strengthen the QAR.
The expected trading range for the AED to QAR over the coming months is likely to remain narrow, reflecting current trading around its three-month average.
Upside risks include a potential recovery in oil prices, enhancing the QAR's strength as Qatar's economy is closely tied to oil revenues. Conversely, downside risks loom due to uncertainties surrounding global inflation trends that could impact both currencies differently, especially as interest rates adjust further.