AED/MYR Outlook:
Slightly weaker, but likely to move sideways, as the rate is below its recent average and near its 3-month range low.
Key drivers:
• Rate gap: The UAE Dirham's peg to the US Dollar supports its stability, while the Bank Negara Malaysia's recent policy adjustments contribute to the Ringgit's strength.
• Risk/commodities: Oil prices are currently above their average, which offers some support to the AED given the UAE's dependence on oil revenues.
• One macro factor: Malaysia's strong GDP growth reflects economic resilience, helping to strengthen the MYR against the AED.
Range:
AED/MYR is likely to drift within its recent range, as movements remain constrained by existing pressures.
What could change it:
• Upside risk: A significant surge in global oil prices could strengthen the AED.
• Downside risk: Weaker-than-expected economic data from Malaysia could diminish MYR strength.