Bias: Range-bound, current level sits above its 90-day average and in the upper half of the 3-month range.
Key drivers:
- Rate gap: The RBA is leaning toward policy tightening in coming years while the CBRT has eased, widening the policy gap and supporting AUD versus TRY as investors price in higher Australian yields.
- China/ commodities: China's softer inflation weighs on demand for Australian iron ore and coal, trimming the commodity-driven lift to the AUD and keeping gains modest.
- Macro factor: AU CPI and labour data due this month could swing RBA expectations; a hotter inflation print would reinforce a hawkish tilt and support the AUD.
Range: The pair is expected to drift within a tight range, with a possible test of the upper end given current strength and China-linked demand signals.
What could change it:
- Upside risk: A stronger-than-expected AU CPI reading or a clearer hawkish tilt from the RBA would lift AUD/TRY.
- Downside risk: Turkish inflation accelerates or policy remains easy longer, strengthening the TRY and pushing AUD/TRY lower.
