Bias: range-bound, current is above the 3-month average and sits in the upper half of the 3-month range, while its position relative to the 90-day average remains unclear.
Key drivers:
Rate gap: RBA discussions about possible rate hikes in 2026 contrast with Taiwan’s cautious stance, widening the policy gap that supports AUD in cross-border flows.
China demand/commodities: China’s uneven rebound dampens demand for Australian exports, weighing on iron ore and coal prices and narrowing upside for the AUD.
Australian data: Upcoming CPI and jobs figures in January could steer the AUD near term, with stronger readings boosting rate expectations and the Aussie.
Range: AUD/TWD is likely to drift within the 3-month range, staying near the upper end and testing only modestly toward the top.
What could change it:
Upside risk: clearer signs that inflation is trending higher in Australia or a hotter CPI could embolden the RBA to hike, lifting AUD.
Downside risk: a noticeable China slowdown or softer Australian data could push AUD/TWD toward the lower end of the range.