Recent analyst forecasts and currency market updates indicate that the AED to ZAR exchange rate may be influenced by various economic and geopolitical developments in both regions. As of the latest data, the AED is trading at 4.9014, which is 1.8% below its three-month average of 4.9926, reflecting the volatility in the currency pair which has seen a range of 11.7% from 4.8214 to 5.3844.
Geopolitical tensions, particularly the military strikes by Israel on Iran, have raised oil prices and introduced market volatility that could favor the AED, known for its pegging to the dollar, which directly benefits from higher oil prices. Analysts suggest that these rising oil prices, currently at 77.01 USD marked at 14.3% above the three-month average of 67.35, could support the AED's value against the ZAR as the UAE capitalizes on its oil wealth amid regional instability.
Economic growth forecasts for the UAE remain optimistic, with the Arab Monetary Fund projecting a growth rate of 6.2% for 2025, driven by robust sectors like tourism and real estate. This growth outlook may bolster the AED further. However, recent reports of slowing growth in the UAE’s non-oil sector, which achieved its weakest performance in nearly four years, introduce concerns regarding sustained economic diversification.
On the ZAR front, analysts highlight that South Africa’s situation is precarious, particularly due to a 30% tariff imposed by the US as part of ongoing trade tensions. This development may dampen investor sentiment towards the ZAR, especially since South Africa relies heavily on foreign investment to address its large budget and current account deficits.
In summary, the AED's performance against the ZAR is currently shaped by a mix of supportive oil prices and positive economic indicators from the UAE, tempered by potential headwinds from regional instability and mixed economic signals from South Africa. As both currencies navigate through these influences, monitoring geopolitical developments, oil price fluctuations, and trade negotiations will be crucial for those engaged in international transactions.