The exchange rate for AED to CAD has recently shown a stable performance, currently valued at 0.3726, which is 1.9% below its three-month average of 0.3798. This stability can be attributed to a narrow trading range of 3.3%, fluctuating between 0.3722 and 0.3843. Analysts indicate that the Canadian dollar (CAD), commonly impacted by shifts in oil prices due to Canada's status as a major oil exporter, has faced downward pressure as oil prices have recently declined. The current oil price is at $60.89, which is 3.9% below the three-month average of $63.35, demonstrating notable volatility in the oil market with an 18.8% range from $59.04 to $70.13.
Several factors are influencing the CAD's performance. The Bank of Canada has held its interest rates at 2.25%, while uncertainty around trade policies, particularly due to U.S. tariffs on Canadian imports, has contributed to market volatility. Recent economic indicators, such as a GDP growth of 2.6% in Q3 and a decrease in unemployment to 6.5% in November, have offered some support for the CAD. However, as long as oil prices remain in decline, the potential for further depreciation exists, according to market experts.
Meanwhile, developments in the UAE are worth noting as they could influence the AED's exchange rate. The launch of the digital dirham, set for late 2025, alongside interest rate cuts by the UAE Central Bank to 3.90%, aims to bolster financial stability and consumer affordability. Despite these changes, the AED's exchange rate against the USD and, by extension, the CAD has remained stable, highlighting the effectiveness of the UAE’s fixed exchange rate regime.
Overall, the future trajectory of the AED/CAD exchange rate will likely continue to be shaped by the interdependencies of oil prices, interest rate policies, and broader economic conditions in both Canada and the UAE. Traders and businesses engaged in international transactions should monitor these developments closely to navigate potential fluctuations effectively.
