AUD/AED Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear current driver.
Key drivers:
• Rate gap: The Reserve Bank of Australia is anticipated to increase interest rates due to rising inflation, while the UAE's Central Bank maintains a stable rate approach, creating support for the AUD.
• Risk/commodities: The recent decline in metal prices initially pressured the AUD, but recovery in this sector could support its value going forward.
• One macro factor: China’s tariffs on Australian beef may negatively affect export revenues, creating uncertainty for the AUD's performance.
Range: The AUD/AED is expected to drift within its recent range as current conditions lack strong directional influence.
What could change it:
• Upside risk: A confirmed interest rate hike from the RBA could strengthen the AUD further.
• Downside risk: Continued weakness in commodity prices or deteriorating trade relations with China could pressure the AUD lower.
