The AUD to CNY exchange rate currently shows a bullish bias.
Key drivers include:
• Anticipated interest rate hikes by the Reserve Bank of Australia, potentially increasing the AUD's appeal compared to the CNY.
• Goldman Sachs’ delay of China's monetary easing signals a cautious approach that could support the yuan.
• A positive economic outlook for Australia is driven by growing inflation, likely prompting the RBA to act.
Over the next few months, the AUD/CNY exchange rate is expected to trade within a narrow range, reflecting its recent stability.
An upside risk could arise if China's economic performance weakens significantly, boosting demand for the AUD due to its attractiveness as a commodity currency. Conversely, a faster-than-expected monetary easing from China could strengthen the CNY, putting downward pressure on the AUD/CNY rate.