Bias: The USD/QAR exchange rate is range-bound, as it is near the 90-day average while trading in the middle of the 3-month range.
Key drivers:
• Rate gap: The US Federal Reserve is expected to shift towards rate cuts, while the Qatar Central Bank maintains its peg to the USD, keeping the rate gap relatively stable for now.
• Risk/commodities: Oil prices are above their 3-month average, which is supportive for the Qatari economy and the strength of the QAR.
• Macro factor: Qatar's GDP is projected to grow significantly, which should positively influence confidence in the QAR.
Range: The USD/QAR is likely to hold its current levels as both currencies maintain stability.
What could change it:
• Upside risk: If labor market data points to stronger than expected job growth in the US, it could boost the USD.
• Downside risk: Any dovish signals from Fed policymakers could weaken USD demand, causing the exchange rate to decline.
