The Canadian dollar (CAD) has faced downward pressure recently due to slow progress in US-Canada trade negotiations and recent political developments in Canada. Analysts are concerned that these trade talks, crucial for the Canadian economy, are not advancing as hoped, leading to uncertainty in the currency markets.
Recent forecasts indicate that although the CAD shows some resilience due to the Bank of Canada's decision to pause interest rate cuts, the outlook remains clouded by geopolitical tensions and trade policies. In March 2025, tariffs imposed by the U.S. on Canadian steel and aluminum led to retaliatory tariffs, adding to the complexities for Canadian exporters and impacting the CAD's performance. According to market analysts, the CAD's current trading range at 2.6897 is only 0.9% above its three-month average, indicating a stable period amidst the underlying volatility from external economic pressures.
Additionally, oil price fluctuations continue to play a significant role in shaping the CAD's value. With oil prices recently trading at 68.64, which is 2.5% higher than the three-month average, Canada’s status as a major oil exporter provides some support for the currency. However, the highly volatile nature of oil, which has swung in a 31.1% range recently, underscores the potential for rapid changes in the CAD's value depending on global oil market trends.
On the other hand, the UAE Dirham (AED) is influenced by its robust economic growth forecasts and ongoing geopolitical tensions in the region. The Arab Monetary Fund projects a strong growth rate of 6.2% for the UAE economy in 2025, driven by improvements in various sectors such as tourism and trade. However, the slowing growth in the UAE's non-oil private sector introduces uncertainties that could affect the AED's stability.
Given these dynamics, CAD to AED exchange rates are poised for continued fluctuation. With analysts warning that the CAD may struggle to gain significant strength due to U.S. trade policy uncertainty and political instability, businesses and individuals should monitor developments closely to optimize their international transactions.