AUD/PKR Outlook:
The AUD/PKR exchange rate is likely to increase as it stands significantly above its recent average and is trading near the higher end of its three-month range. This uptick is driven primarily by ongoing economic factors in Australia.
Key drivers:
• Rate gap: The Reserve Bank of Australia’s recent interest rate hike signals continued tightening, contrasting with a stable stance from the State Bank of Pakistan, strengthening the AUD.
• Risk/commodities: Rising commodity prices, especially in gold, support the value of the AUD, as Australia is a major exporter.
• One macro factor: Improved economic indicators from China are expected to boost demand for Australian exports, further enriching the AUD.
Range:
Expect the AUD/PKR to test recent highs while maintaining volatility within its three-month range.
What could change it:
• Upside risk: A surprise additional interest rate increase by the RBA could further elevate the AUD.
• Downside risk: A deterioration in global risk appetite could lead to reduced demand for commodity currencies like the AUD.
