AUD/HKD Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The Reserve Bank of Australia (RBA) is signaling potential rate hikes due to rising inflation risks, while the Hong Kong Monetary Authority (HKMA) maintains low rates to support its currency peg.
• Risk/commodities: Recent volatility in oil prices may influence risk appetite, affecting demand for AUD, which often tracks commodity prices.
• One macro factor: Australia’s upcoming inflation figures could bolster the AUD if they indicate rising price pressures.
Range: The AUD/HKD is likely to hold within its recent range, oscillating without significant moves towards extremes for the time being.
What could change it:
• Upside risk: A stronger-than-expected inflation report could enhance perceptions of RBA tightening.
• Downside risk: A deterioration in China's economic performance may reduce demand for Australian exports, weakening the AUD.
