AUD/MXN Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The Reserve Bank of Australia's recent interest rate hike contrasts with the Bank of Mexico's easing, creating a favorable environment for the AUD.
• Risk/commodities: The recent increase in demand for Australian commodities, supported by China's economic activity, has underpinned the AUD's strength.
• One macro factor: Ongoing declines in Australian consumer confidence are raising concerns about domestic economic health, which could weigh on the AUD.
Range:
Expect the AUD/MXN to hold within its recent range, potentially drifting sideways as market factors influence price movements.
What could change it:
• Upside risk: A substantial recovery in Australian consumer sentiment could strengthen the AUD further.
• Downside risk: Continued weakness in global risk appetite could lead to sharper declines in the AUD.