The USD/AED exchange rate dropped to a low of 3.67, the lowest level since August 2022. In all, the USD to AED has been relatively stable this year. At its peak, the pair was trading at 3.673. So, what next for the Emirati dirham?
Tourism surge, crude oil prices retreat
The United Arab Emirates, like other countries in the region, has done well in the past few years, helped by the robust oil and gas prices. Recently, however, the prices of energy has crashed hard. Brent, the global benchmark, has crashed to $76.55. It has dropped by more than 44% from the highest point in 2022.
The same is true in the natural gas market. Data compiled by TradingView shows that natural gas prices have plunged by over 76% from the highest level in 2022. This means that the United Arab Emirates will make less money than it did in 2022.
Still, the economy will likely do well because of the tourism and finance industries. Data shows that Dubai welcomed over 3.1 million visitors in the first two months of the year. If this trend continues, there is a likelihood that the number of visitors this year will be more than in 2022 when the country recorded 14.36 million visitors.
The country is also benefiting from the strong inflows of funds from Russia, China, and Asian countries. There are now over 4,000 millionaires in Dubai while the number of hedge funds in the country has soared. Dubai is now talking with 60 hedge funds that are seeking to establish offices. In a statement, Arif Amiri, the CEO of DIFC said:
“It is encouraging to see that we are attracting the attention of international hedge funds, with a record number registering in 2022, up 54 per cent YoY, and more in the pipeline.”
USD/AED technical analysis
The daily chart shows that the USD to AED exchange rate has been in a downward trend. It has moved below the important support at 3.6722, the lowest level on December 22. The pair has also moved below the 25–day moving average while the Relative Strength Index (RSI) has moved below 50.
Therefore, the outlook of the pair is bearish, with the next level to watch being at 3.6700. A move above the resistance point at 3.6722 will invalidate the bearish view.
Source : https://invezz.com/news/2023/05/10/usd-to-aed-usd-aed-rate-falls-despite-oil-and-gas-prices-retreat/
