AUD/EUR Outlook:
The Australian dollar (AUD) is currently above its recent average and near recent highs, indicating a bullish outlook. This is supported by a strong performance in commodity prices and ongoing positive economic data from Australia.
Key drivers:
• Rate gap: The Reserve Bank of Australia's cautious approach contrasts with the European Central Bank's accommodative stance, supporting the AUD.
• Risk/commodities: Oil prices trading significantly above average bolster the AUD due to high demand for Australian commodities.
• One macro factor: Strong consumer confidence in Australia has positively influenced the AUD's performance, reflecting a robust domestic economy.
Range:
Expect movement to drift within the recent range, potentially testing upper extremes due to favorable conditions.
What could change it:
• Upside risk: An unexpected improvement in global trade relations could further boost demand for the AUD.
• Downside risk: Renewed geopolitical tensions, particularly concerning trade policies, could pressure the AUD lower.
