The EUR to AED exchange rate is currently biased towards range-bound trading.
Key drivers include:
- A stable euro driven by positive economic growth projections for the Eurozone, particularly a GDP growth of 1.6% in 2026.
- The interest rate differential is maintained as the European Central Bank takes a data-dependent approach to maintain balance in inflation and growth.
- Significant developments in the UAE, like the anticipated Digital Dirham, could enhance the AED's appeal in international transactions.
Over the next 1-3 months, expect the EUR to trade within a stable range, due to recent price stability near 4.2922.
An upside risk could arise from stronger-than-expected eurozone economic indicators, while a downside risk includes renewed geopolitical tensions affecting euro performance adversely. Additionally, fluctuations in oil prices, currently volatile but nearing highs, may further impact the AED, given its ties to oil markets.