AUD/PKR Outlook:
The AUD/PKR rate is slightly weaker, but likely to move sideways as it trades just above its recent average and shows mixed signals from key drivers.
Key drivers:
• Rate gap: The Reserve Bank of Australia's cautious approach contrasts with the State Bank of Pakistan's efforts to stabilize its currency, affecting capital flows.
• Risk/commodities: Recent volatility in oil prices may influence the AUD given its commodity-linked nature, while stability in PKR suggests reduced risk for its exchange rate.
• Macro factor: Improved foreign exchange reserves in Pakistan indicate a gradual recovery, which could lend support to the PKR.
Range:
Expect the AUD/PKR to hold within its recent range, with potential for slight drifts rather than testing the extremes.
What could change it:
• Upside risk: A stronger-than-expected rebound in Australian economic data could lift the AUD further.
• Downside risk: Continued geopolitical tensions affecting regional stability may pressure the PKR.