AUD/TRY Outlook:
Likely to increase, as the rate is significantly above its recent average and near recent highs, supported by strong monetary policy adjustments.
Key drivers:
• Rate gap: The Reserve Bank of Australia has recently increased interest rates to combat high inflation, while the Central Bank of Turkey continues to cut rates amidst a declining inflation trend.
• Risk/commodities: Australian commodities are in demand, benefiting from China's sustained economic activity, which tends to strengthen the AUD.
• One macro factor: Recent Australian inflation data points to price rises, signaling ongoing pressure on the RBA to maintain tight monetary policy.
Range:
The AUD/TRY is likely to test recent highs within its volatile 3-month range, potentially drifting higher as fundamental conditions support the Aussie.
What could change it:
• Upside risk: Further aggressive monetary policy tightening from the RBA could drive the AUD higher.
• Downside risk: A sudden downturn in the demand for Australian exports could weaken the AUD significantly.