AUD/TRY Outlook:
The AUD/TRY pair is likely to increase as it is currently trading above its recent average and near recent highs. The Australian dollar is benefiting from strong interest rate expectations in Australia, which support its strength against the Turkish lira.
Key drivers:
• Rate gap: The Reserve Bank of Australia's recent rate hike is significantly higher than the Turkish central bank's rate of 49%, creating a favorable rate differential for the AUD.
• Risk/commodities: Improving commodity prices, particularly gold, are beneficial for Australia, supporting a stronger AUD.
• Macro factor: The Australian consumer price index indicates persistent inflation, reinforcing expectations of further rate hikes from the RBA.
Range:
Expect the AUD/TRY to test higher levels within its recent 3-month range, driven by ongoing interest rate dynamics.
What could change it:
• Upside risk: Adverse economic data from the U.S. could further weaken the USD, benefiting the AUD.
• Downside risk: Any signs of easing inflation in Australia could lead to reduced rate hike expectations, pressuring the AUD.