AED/VND Outlook:
Slightly weaker, but likely to move sideways as the rate is below its recent average and within its mid-range.
Key drivers:
• Rate gap: The UAE Dirham's peg to the US Dollar provides a stable foundation, while fluctuations in the Vietnamese Đồng reflect local economic factors and policies.
• Risk/commodities: Global oil prices are currently volatile, impacting the UAE's foreign reserves and, consequently, the Dirham's strength.
• One macro factor: The Federal Reserve's recent interest rate cuts are easing pressure on the USD/VND exchange rate, potentially stabilizing the VND.
Range:
The AED/VND exchange rate is likely to drift within its recent range with no immediate triggers for significant movement.
What could change it:
• Upside risk: A significant increase in global oil prices could strengthen the AED, improving its value against the VND.
• Downside risk: Economic uncertainty surrounding Vietnam’s upcoming legislative elections might negatively affect the VND.
