AUD/TRY Outlook:
The AUD/TRY is likely to increase as the Australian dollar is trading well above its recent average and closer to recent highs. Strong domestic economic data supports a positive outlook for the AUD.
Key drivers:
• Rate gap: The Reserve Bank of Australia's (RBA) potential for interest rate hikes contrasts sharply with the Central Bank of Turkey’s recent rate cuts, making the AUD more attractive.
• Risk/commodities: High demand for Australian commodities, driven by China's economic recovery, continues to support the AUD against the TRY.
• Macro factor: Recent robust Australian employment figures contribute to expectations of further monetary tightening by the RBA, which strengthens the AUD.
Range:
The AUD/TRY is likely to test recent highs while remaining within the current volatile range.
What could change it:
• Upside risk: A significant improvement in Australia's economic data could bolster the AUD further.
• Downside risk: Further deterioration of the Turkish economy or aggressive monetary policy by Turkey could pressure the TRY.