Recent analyses indicate a challenging outlook for the exchange rate between the UAE Dirham (AED) and the Taiwan Dollar (TWD). Current trading data shows the AED to TWD is at 90-day lows near 7.8770, substantially lower by 5.6% from its three-month average of 8.346. The exchange rate has fluctuated within a 14.7% range from 7.8770 to 9.0356, reflecting significant volatility influenced by geopolitical and economic factors.
For the AED, a range of recent developments may substantially impact its value. Increased geopolitical tensions in the Middle East, particularly following military actions involving Israel and Iran, have led to market declines and heightened oil prices, which frequently correlate with the strength of the AED. Furthermore, while the Arab Monetary Fund projects a robust economic growth of 6.2% for the UAE in 2025, dissatisfaction in the non-oil sector reflects potential weaknesses in the economy's diversification efforts.
Trade negotiations between the UAE and the U.S. aimed at lowering tariffs on steel and aluminum export could also have far-reaching effects on the AED. Analysts are closely monitoring these negotiations as they could influence the trade balance and, subsequently, the currency’s strength. Moreover, the UAE's drive for AI investments introduces potential opportunities for long-term economic growth, although short-term fluctuations may still persist.
On the other hand, the Taiwan Dollar faces its own set of challenges. The imposition of a 32% reciprocal tariff rate by the U.S. as part of ongoing trade tensions could drag down Taiwan's export-driven economy, heavily reliant on its technology sector. Additionally, concerns over a potential Chinese invasion and escalating geopolitical tensions pose risks that could undermine TWD stability.
The contrasting economic trajectories and geopolitical tensions in both regions underscore the volatility in the AED/TWD exchange rate. For individuals and businesses engaged in international transactions, staying informed on these developments may prove beneficial in navigating currency exchanges and mitigating costs.