AED/THB Outlook:
The AED/THB exchange rate is likely to decrease as it is currently trading below its recent average and near the recent lows. This weakness is driven by ongoing pressures in the Thai economy.
Key drivers:
• Rate gap: The Bank of Thailand's rate decisions are more aggressive compared to the UAE Central Bank's recent rate cut, impacting the relative strength of the two currencies.
• Risk/commodities: The recent rise in oil prices may support the AED through its correlation with oil revenue; however, the volatile oil market continues to create uncertainties for both currencies.
• Economic forecasts: Strong predictions for the Thai economy suggest continued growth, which may bolster the THB against the AED.
Range:
Expect the AED/THB to drift within its recent 3-month range, facing challenges to regain upward momentum.
What could change it:
• An unexpected shift in UAE monetary policy could strengthen the AED.
• A downturn in the Thai economy or intervention by the Bank of Thailand could pressure the THB downward.