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 alignment with the US Federal Reserve's rates supports AED stability against the Singapore Dollar.
- Risk/commodities: With oil prices stable, there’s limited impact on the AED, reinforcing its position amid a global backdrop of cautious trade.
- Economic growth outlook: Singapore's GDP growth is projected to moderate, which may temper any aggressive moves of the SGD.
Range: The AED/SGD pair is likely to hold within its recent range, given the stable economic indicators and monetary policies of both countries.
What could change it:
- Upside risk: A sudden improvement in oil prices could strengthen the AED against the SGD.
- Downside risk: A significant escalation in trade tensions might weigh on the SGD, potentially impacting the AED’s stability.
