AUD/PKR Outlook:
The AUD/PKR exchange rate is likely to increase as it is currently trading above its recent average and near 3-month highs. The Australian dollar is benefiting from positive interest rate expectations from the Reserve Bank of Australia (RBA).
Key drivers:
• Rate gap: The RBA's hawkish stance contrasts with the State Bank of Pakistan's stable rate, making the AUD more attractive to investors.
• Risk/commodities: Rising commodity prices, particularly iron ore, driven by China's economic recovery, bolster the AUD in relation to the PKR.
• Economic outlook: Positive Westpac Consumer Confidence data indicates improved domestic sentiment in Australia, which supports the AUD.
Range:
Expect the AUD/PKR to test the upper end of its recent range as positive trends may encourage upward movement.
What could change it:
• Upside risk: Continued robust economic data from Australia could further strengthen the AUD.
• Downside risk: Any unexpected deterioration in global commodity prices may pressure the AUD against the PKR.