AUD/HKD Outlook: The outlook for AUD/HKD is bullish as it is currently trading at 90-day highs and 4.4% above its recent average, supported by strong economic data from Australia.
Key drivers:
- Rate gap: The Reserve Bank of Australia's hawkish stance on potential rate hikes contrasts sharply with the low rates maintained by the Hong Kong Monetary Authority.
- Risk/commodities: Ongoing high commodities prices, particularly in iron ore and coal, support the Australian dollar, while the HKD is pressured by near-zero interest rates in Hong Kong.
- One macro factor: Recent employment data showing a drop in Australia's unemployment rate bolsters confidence in the AUD and hints at future economic strength.
Range: AUD/HKD is likely to drift within its recent range, possibly testing the higher end as bullish factors prevail.
What could change it:
- Upside risk: A further unexpected rise in commodities prices could strengthen the AUD further.
- Downside risk: A significant pullback in global investor risk appetite could weaken commodity demand, impacting the AUD negatively.