Bias: bullish-to-range-bound, AUD/WST sits above its 90-day average and in the upper half of the 3-month range.
Key drivers:
• Rate gap: The RBA has signaled possible rate hikes in 2026, while the CBS continues to reduce excess liquidity, widening the policy gap in favor of AUD.
• Macro factor: Upcoming Australian CPI and employment data this month could steer near-term moves for AUD/WST.
• Risk/commodities: The Australian dollar remains tied to commodity prices and China demand; firmer ore and energy prices support the AUD, while a softer Chinese backdrop can cap gains.
Range: AUD/WST is likely to drift within the 3-month band, holding near the upper end with occasional tests of the top.
What could change it:
• Upside risk: unexpectedly strong Australian data or clearer signs of policy tightening from the RBA.
• Downside risk: softer Australian data or a move into risk-off conditions.