Dubai is becoming the world’s most travelled destination. Economic and various market factors have helped Dubai achieve this. It links Asia, Africa, and Europe and welcomes smooth business flow between these continents. Economic flight options and efficient travel times are important factors that project Dubai’s global image, especially among tourists. In this blog, we will be talking about the driving forces behind the forex market in Dubai
Recently, Dubai has gained momentum, becoming the world’s epicentre for business. It is one of the main reasons every major company has a headquarters in Dubai. According to various surveys, there is an exponential increase in demand for the local currency AED, the United Arab Emirates Dirham. Dubai has always projected itself as a luxurious place with iconic architecture and booming real estate.
Another reason that attracts tourists worldwide is the annual festivals. Be it a vibrant world-class shopping festival, fantastic nightlife, concerts, and an F1 race, the city offers something for every age group. Let us see how tempting and luxurious life is a driving force in the world forex market.
1. Increased Currency Exchange Demand
- Tourists worldwide flock to Dubai to experience its uniqueness and luxury. This is one of the major reasons diverse currencies are being exchanged in the AED. This activity may increase liquidity in the forex market, generating more trading opportunities.
- Around 12 million passengers from India travelled to Dubai in 2023. It strengthened Dubai’s number 1 spot as the most travelled destination, pushing India to the top as an international arrival. This can bring high liquidity and be the reason for strengthening AED and INR in the global market.
2. Cross Border Business Transactions
Dubai’s political and economic environment has always been welcoming and has become one of the driving forces behind making the place a global business hub. As mentioned, various big companies operating worldwide have their headquarters in Dubai. Companies exchange currency for trade, investment, and expansion. It further increases the liquidity of currencies, strengthening forex markets.
3. Strengthening of AED
Tourism revenues, including luxury, travel, and hospitality, are at an all-time high and are the main reason for strengthening the AED. The exponential growth rate is moving steadily, which attracts forex traders worldwide to trade with AED pairs. Stability always attracts forex traders, as they prefer predictable currency movements.
4. Influence of the Dubai Expo
Dubai Expo has elevated its global profile. These types of global events guarantee a long-term influx of tourists and investment. Due to diverse financial flows, these events can increase forex activities in the home currency (AED).
5. Remittances and Forex Flow
Dubai has a large population of foreign workers who send money back home. This has been one of the driving forces that led to the currency exchange, increasing liquidity and forex activities. At the same time, money coming to Dubai for property purchases and tourism keeps AED important in the market.
6. Oil Prices and the Role of Tourism
Dubai’s economy is not dependent on oil prices, but they considerably affect the forex markets. The robust travel sector balances the volatility arising from oil price fluctuation.
7. Digital Payment System and Crypto Integration
Dubai has accepted modern payment systems, including crypto, which enhances forex attractiveness. It provides new and advanced exchange platforms which promote innovative trading.
Conclusion
Dubai is a perfect place to become a new global centre for forex trading and related activities. Its economy energises the forex market, creating business and world trade opportunities. Dubai’s economic reforms have attracted investors and made it a significant player in the forex landscape.