CAD/AED Outlook: Slightly positive, but likely to move sideways, as the CAD trades above its recent average but lacks a clear driver pushing it higher.
Key drivers:
• The Bank of Canada is maintaining its policy rate, signaling confidence in controlling inflation without hindering economic growth, which supports the CAD.
• Oil prices have risen significantly, benefiting the CAD due to Canada's status as a major oil exporter. A sustained rise in oil could strengthen the CAD further.
• Canada has reached a new trade agreement with China, which could enhance its export outlook and support the CAD.
Range: The CAD/AED is likely to drift within its recent range as it consolidates, without strong sentiment to push it to the extremes.
What could change it:
• Upside risk: A significant increase in oil prices could boost the CAD further.
• Downside risk: New tariffs on Canadian exports to the U.S. could weaken the CAD if implemented.
