The current market bias for the AUD to INR exchange rate is cautiously bullish.
Key drivers include:
- The interest rate differential is tilting positively for the AUD, as the Reserve Bank of Australia is expected to raise rates in early 2026, which could attract foreign investments.
- The AUD benefits from rising commodity prices, helping to support its value against the INR.
- Australia's inflation, recently recorded above the RBA's target range, suggests potential for ongoing economic strength.
In the near term, the exchange rate is expected to be within a stable range, above recent averages, reflecting a positive market outlook.
Upside risks could come from a stronger-than-expected recovery in global commodity prices or intensified interest rate hikes, further boosting the AUD. Conversely, downside risks include worsening geopolitical tensions or weaker export demand impacting the AUD, alongside potential INR strengthening driven by local economic recovery.