AED/THB Outlook:
Slightly weaker, but likely to move sideways as the rate is below its recent average and near its recent lows.
Key drivers:
• Rate gap: The UAE Dirham remains pegged to the US Dollar, whereas the Bank of Thailand intervenes to control THB fluctuations, creating volatility in the Baht.
• Risk/commodities: With oil prices trading significantly above their average, the UAE's oil revenue should generally support the Dirham, but current trends in the price of Brent Crude oil affect THB as well.
• One macro factor: Thailand's central bank has introduced tighter regulations on online gold trading, aiming to stabilize the Baht due to recent fluctuations.
Range:
The AED/THB rate is expected to hold within its recent range, facing challenges to move higher.
What could change it:
• Upside risk: A significant rise in global oil prices could bolster the Dirham's position.
• Downside risk: Continued strength in the Baht due to regulatory interventions could push the AED lower.