Bias: bullish-to-range-bound because AUDPHP trades above its 90-day average (the past three months’ typical level) and sits in the upper half of the 3-month range (the high/low band in the last three months).
Key drivers:
- Rate gap: RBA signals possible hikes in 2026 while BSP is expected to ease, widening the rate gap in AUD's favour.
- Risk/commodities: iron ore and other commodity prices remain a key driver; a firm trend supports the AUD, while sharp swings can reverse gains.
- Macro: China's uneven rebound dampens Australian export demand, weighing on the AUD and keeping the outlook cautious.
Range: drift within the 3-month band, with a test toward the upper end if risk appetite holds and the rate outlook stays favorable for trade and transfers.
What could change it:
- Upside risk: stronger-than-forecast Australian data or a firm RBA rate path increasing the yield gap.
- Downside risk: a sharper slowdown in China or a surprise BSP easing path narrowing the gap.