AUD/PKR Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The Reserve Bank of Australia's recent rate hike increases the attractiveness of the AUD compared to the Pakistani Rupee.
• Risk/commodities: A rise in Australian commodity prices is supportive for the AUD, especially given weakening US dollar trends.
• Macro factor: Australia's inflation rate, now significantly above the RBA’s target, raises expectations for further monetary policy tightening.
Range:
AUD/PKR is likely to test the upper ends of its recent range as it trades above its average, but volatility may limit sustained movement.
What could change it:
• Upside risk: A sustained rally in commodity prices could push the AUD higher.
• Downside risk: Continued geopolitical tensions affecting the PKR could lead to pressure on the AUD/PKR exchange rate.
