AUD/INR Outlook:
The AUD/INR rate is currently trading significantly above its recent average. Despite recent geopolitical uncertainties, the Australian dollar appears strong, supported by expectations of further interest rate hikes by the Reserve Bank of Australia.
Key drivers:
• Rate gap: Recent RBA rate hikes and potential for more increases contrast with the Reserve Bank of India’s steadier approach, favoring the AUD.
• Risk/commodities: Rising commodity prices, particularly gold, are benefiting Australia, thus supporting the AUD against the INR.
• Macro factor: China’s improved manufacturing PMI is a positive sign for Australian exports, which may further strengthen the AUD.
Range:
The AUD/INR is likely to drift but may test the higher end of its recent 3-month range given current conditions.
What could change it:
• Upside risk: A stronger-than-expected economic report from China could boost the AUD further.
• Downside risk: Increased geopolitical tensions could lead investors to seek safer currencies, putting pressure on the AUD.