Bias: The outlook for AUD/PKR is range-bound, as it is near the 90-day average and within the middle of its 3-month range.
Key drivers:
- Rate gap: The Reserve Bank of Australia's potential future rate hikes contrast with expectations of gradual depreciation for the Pakistani Rupee, affecting their exchange dynamics.
- Risk/commodities: Recent declines in commodity demand, influenced by disappointing Chinese inflation, weigh on the AUD, while stabilization of the PKR against the USD indicates cautious improvements.
- One macro factor: Projected inflation in Pakistan remains at around 4.4%, suggesting manageable economic conditions, which could stabilize investor confidence.
Range: The AUD/PKR is likely to hold steady within its recent 3-month range of about 181 to 189, reflecting current market uncertainties.
What could change it:
- Upside risk: A surprising rise in demand for Australian commodities could enhance the AUD's strength.
- Downside risk: A sharp increase in inflation or depreciation in Pakistan could pressure the PKR lower, affecting the exchange rate.