AUD/TRY Outlook: The Australian dollar is slightly positive, but likely to move sideways, as it is above its recent average and trading near the upper end of its 3-month range without a clear driving force.
Key drivers:
• Rate gap: The Reserve Bank of Australia is considering rate hikes to combat inflation risks, while the Central Bank of Turkey has recently reduced its benchmark rate, widening the interest rate differential in favor of the AUD.
• Risk/commodities: Oil prices have seen volatility, with consistent demand for Australia’s commodities potentially supporting the AUD, although recent data indicates uneven recovery in China, impacting overall demand.
• One macro factor: Upcoming Australian economic indicators, including CPI and unemployment figures, may influence the AUD's performance and could shift market perspectives.
Range: The AUD/TRY is likely to hold its current position within the recent trading range, as there are mixed signals from both economies.
What could change it:
• Upside risk: A significant improvement in Chinese economic data could boost demand for Australian exports, strengthening the AUD.
• Downside risk: Continued high inflation in Turkey or further rate cuts could weaken the TRY, but may also add downward pressure on the AUD if concerns rise over global demand.
