Bias: bullish-to-range-bound; current AUD/PKR sits above its 90-day average by about 1.5% and lies in the upper half of the 3-month range.
Key drivers:
- Rate gap: The RBA is signaling tighter policy in 2026, supported by sticky domestic inflation, which keeps the AUD bid firm against PKR even as growth trends diverge.
- Risk/commodities: Commodity markets remain volatile; firmer demand for iron ore and coal can lift AUD appetite, while PKR faces higher import costs from oil and energy swings that weigh on the currency.
- Macro factor: Upcoming Australian CPI and Labour Force data in January could tilt the path for the AUD, depending on whether inflation accelerates or cools.
Range: Likely to drift within the 3-month range, with a mild bias toward testing the upper end as markets stay calm.
What could change it:
- Upside risk: Clearer RBA tightening signals and stronger February data could push AUD higher versus PKR.
- Downside risk: Pakistan's reforms and inflation easing could strengthen PKR, narrowing the gap.