CAD/AED Outlook: The outlook for CAD/AED is slightly positive, but likely to move sideways, as it is above its recent average without a clear driving force.
Key drivers:
• Rate gap: The Bank of Canada recently cut its interest rate, while the UAE’s monetary policy remains stable, offering a favorable interest rate environment for the AED.
• Risk/commodities: Oil prices are currently at multi-month highs, supporting the Canadian dollar due to Canada's status as a major oil exporter, although recent drops in oil prices could limit gains.
• Economic indicators: Upcoming economic data from Canada, including trade and employment numbers, may influence the CAD shortly.
Range: CAD/AED is likely to hold its recent levels, potentially drifting within its stable range.
What could change it:
• Upside risk: A rebound in oil prices could strengthen the CAD significantly.
• Downside risk: Continued uncertainty in trade policies with the U.S. could weaken the CAD further.
