AUD/HKD Outlook: Likely to increase, as the rate is significantly above its recent average and near recent highs, benefitting from favorable Australian economic signals.
Key drivers:
• Rate gap: The Reserve Bank of Australia is expected to increase interest rates, while the Hong Kong Monetary Authority has kept rates near zero, widening the interest differential.
• Risk/commodities: Rising global oil prices could enhance Australia's commodity exports, supporting the AUD.
• One macro factor: Upcoming inflation figures in Australia may reinforce expectations for further RBA rate hikes, potentially bolstering the AUD further.
Range: The AUD/HKD is likely to drift higher but may test the recent highs within its volatile range.
What could change it:
• Upside risk: A surprise increase in Australia’s inflation data could lead to a stronger AUD.
• Downside risk: A downturn in the global demand for Australian exports, particularly from China, could weaken the AUD.
