AUD/HKD Outlook:
The AUD/HKD is slightly positive and likely to move sideways as it trades above its recent average, but lacks a strong driver to propel it significantly higher. Currently, the pair is at 14-day lows, providing some downward pressure.
Key drivers:
• Rate gap: The Reserve Bank of Australia’s recent policies appear more accommodating compared to the stable base rate maintained by the HKMA at 4%.
• Risk/commodities: The recent increase in global oil prices is pressuring AUD as Australia is a net energy importer, raising costs and inflation risks.
• One macro factor: Anticipation of Australia’s GDP data may affect the AUD's trajectory, with expectations of growth boosting the currency.
Range:
The AUD/HKD is likely to drift within its recent 3-month range as it faces mixed signals from both domestic and global factors.
What could change it:
• Upside risk: A strong GDP report could bolster the AUD significantly.
• Downside risk: Continued geopolitical tensions may further weaken the AUD as investors seek safer assets.
