AUD/PKR Outlook:
AUD/PKR is likely to increase, trading above its recent average and near recent highs, supported by strong domestic job data and favorable commodity demand.
Key drivers:
• Rate gap: Australia's central bank appears poised for further monetary tightening, contrasting with Pakistan's stable interest rate, which could attract more investment to the AUD.
• Risk/commodities: Increased demand for Australian exports like iron ore, boosted by China's economic recovery, enhances the AUD's appeal.
• Macro factor: Recent robust Australian employment figures suggest a strengthening economy, raising expectations for more aggressive rate hikes by the Reserve Bank of Australia.
Range:
Expect AUD/PKR to test the upper extremes of its recent range, influenced by current bullish factors.
What could change it:
• Upside risk: A continuing surge in commodity prices could further support the AUD.
• Downside risk: A deterioration in global risk appetite due to geopolitical tensions might weigh on the AUD.