The exchange rate between the Canadian Dollar (CAD) and the United Arab Emirates Dirham (AED) is currently trading near 90-day highs at approximately 2.7061 AED per CAD, which is 1.7% above its three-month average of 2.6597 AED. This stability, with the rate fluctuating in a modest 5.1% range, indicates a resilient CAD supported by various factors, while the AED's performance highlights the UAE's economic dynamics.
Recent market analyses suggest that the CAD is being buoyed by its correlation with the stronger US dollar. However, oil price fluctuations, a significant factor for the CAD given Canada’s status as a major oil exporter, have introduced some volatility. Currently, oil prices are about 3.2% above their three-month average at $68.80, showcasing a turbulent trading environment with a substantial 31.1% range recently observed. Analysts recommend closely monitoring oil price trends, as any decline may correspondingly weaken the CAD against the AED.
Political and economic developments in Canada are contributing to the CAD outlook as well. The recent appointment of Prime Minister Mark Carney following Justin Trudeau's resignation amid political instability could impact investor confidence. Additionally, ongoing trade tensions with the U.S., marked by imposed tariffs, have raised concerns among analysts who anticipate limited upside for the CAD as these trade negotiations unfold.
On the other hand, the AED is influenced by the UAE's economic growth, projected at 6.2% for 2025, which reflects positive improvements in sectors like tourism and trade. However, recent challenges in the non-oil sector's performance and geopolitical tensions in the region could introduce headwinds for the AED.
Market experts advise keeping an eye on the Bank of Canada’s policies, as well as global trade developments, as these will be pivotal for the future trajectory of the CAD to AED exchange rate. The interplay of these factors could create further volatility and opportunities for those engaged in international transactions between Canada and the UAE.