AED/VND Outlook: Slightly weaker, but likely to move sideways, as the rate hovers near its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The UAE Dirham is stable due to its peg to the US Dollar, while the Vietnamese Đồng is experiencing adjustments from the IMF that may affect its stability.
• Risk/commodities: The drop in oil prices can weigh on the AED, potentially impacting the UAE's income from oil exports, while a lower USD may benefit the VND.
• One macro factor: Vietnam's anticipated GDP growth of around 7% in 2026 might offer support to the VND despite current challenges.
Range: The AED/VND is expected to drift within the recent range, fluctuating slightly as conditions remain stable.
What could change it:
• Upside risk: A significant rise in oil prices could bolster the AED against the VND.
• Downside risk: Continued U.S. Federal Reserve interest rate cuts could strengthen the VND further, putting downward pressure on the AED.