Outlook
The AED looks set to stay supported as UAE growth remains anchored by a strong 2026 budget, major infrastructure, and the shift to digital government payments; policy talks abroad could subtly shape moves.
Key drivers
- Fiscal strength from a AED 92.4 billion budget for 2026 supports balanced growth and credibility.
- Dubai Loop railway and other projects lift activity and import demand, aiding AED resilience.
- Digital dirham in government use enhances payment efficiency and policy effectiveness.
- UAE participation in Davos signals policy clarity and international economic engagement.
- Upcoming monetary policy conference in Abu Dhabi keeps policy dialogue in focus.
Range
AED/USD 0.2723; AED/EUR 0.2346 near 30-day highs, 1.3% above the 3-month average of 0.2317 (range 0.2263–0.2350). AED/GBP 0.2039 near 60-day highs, 1.0% above the 3-month average of 0.2018 (range 0.1968–0.2047). AED/JPY 42.89, 0.9% above the 3-month average of 42.51 (range 41.47–43.32).
What could change it
- A stronger-than-expected budget outturn or policy tweaks could lift AED strength.
- Delays or changes to the Dubai Loop could temper near-term momentum.
- Faster adoption of the digital dirham or clearer rollout plans could shift flows.
- Shifts in global rate expectations or risk appetite could alter AED moves.
- Outcomes from Abu Dhabi policy discussions could set new policy cues.
