The recent forecasts for the CAD to AED exchange rate indicate a cautious outlook, as key influencing factors emerge from both Canadian and UAE economic developments. Analysts highlight the surge of the USDCAD above 1.38, driven by a cautious Bank of Canada (BoC) and a more aggressive Federal Reserve, which strengthens the US dollar against the Canadian dollar. The loonie is expected to align closely with oil price dynamics, as Canada remains a significant oil exporter. Recently, oil prices have shown an upward trend, currently trading at 72.53 USD per barrel, which is 6.7% above the three-month average of 67.95 USD. This increase in oil prices could provide notable support to the CAD if the upward momentum continues.
However, the CAD is facing pressure from political instability within Canada, notably following Prime Minister Justin Trudeau's resignation and ensuing leadership changes. Additionally, trade relations with the U.S. have soured, particularly following the imposition of tariffs on Canadian steel and aluminum. These developments could limit the upside potential for the CAD, as analysts suggest a constrained outlook amidst rising trade tensions and political uncertainty.
The exchange rate data for CAD to AED indicates that it is currently at 60-day lows near 2.6496, just below its three-month average. This stability suggests some resilience in the face of broader economic challenges. Meanwhile, the UAE Dirham (AED) is influenced by distinct factors, including economic growth forecasts of 6.2% for 2025 and geopolitical tensions following military activities in the region. The non-oil sector's slowed growth has also raised concerns about the diversification of the UAE economy.
Moving forward, the CAD to AED exchange rate will depend heavily on oil market trends, the BoC's policy direction, and any developments regarding trade relations between Canada and the U.S. As the markets react to ongoing geopolitical and economic shifts, careful monitoring of both oil prices and currency policies will be essential for businesses and individuals engaged in international transactions.