Bias: The AUD/AED outlook is bullish-to-range-bound, as current levels are above the 90-day average and within the upper half of the 3-month range.
Key drivers:
- Rate gap: The Reserve Bank of Australia's discussions on potential interest rate hikes may support the AUD, contrasting with the Central Bank of the UAE's alignment with the US Federal Reserve's policies.
- Risk/commodities: Recent softening in Chinese inflation has raised concerns about demand for Australian exports, directly impacting AUD performance as it is a commodity currency.
- One macro factor: Upcoming Australian economic indicators, including CPI and labour force data, will likely influence the AUD's direction amid current global uncertainties.
Range: Expect AUD/AED to hold steady within its recent range, though it could drift higher if positive data emerges.
What could change it:
- Upside risk: Strong Australian economic data could boost the AUD further.
- Downside risk: Continued weakness in Chinese economic indicators might exert downward pressure on the AUD.
