AED/TWD Outlook:
The AED/TWD is slightly positive, but likely to move sideways as it is just above its recent average and within a stable trading range.
Key drivers:
• Rate gap: The UAE Central Bank has reduced the base interest rate, while Taiwan's central bank is maintaining a stable policy rate, benefiting the AED.
• Risk/commodities: Oil prices remain stable, supporting the UAE's economy and consequently strengthening the AED against the TWD.
• One macro factor: Taiwan's strong export performance has helped the TWD remain resilient despite global currency fluctuations.
Range:
Expect movement to hold steady within the recent range after slight upward pressure.
What could change it:
• Upside risk: A further tightening of UAE monetary policy could support AED appreciation.
• Downside risk: If Taiwan's economic outlook improves significantly, it may boost the TWD against the AED.
