Bias: The outlook for AUD/WST is range-bound, as the current level is near the 90-day average and within the middle of the 3-month trading range.
Key drivers:
- Rate gap: The Reserve Bank of Australia is positioned for potential rate hikes in 2026, while the Central Bank of Samoa focuses on reducing excess liquidity, creating different monetary policy tracks.
- Risk/commodities: Ongoing volatility in oil and other commodity prices may impact the AUD, as it is sensitive to global demand shifts affecting Australian exports.
- Macro factor: China's economic recovery continues to present challenges for the Australian dollar, particularly in light of disappointing inflation data that suggests weaker demand for Australian commodities.
Range: The AUD/WST is likely to hold steady within this recent trading range, as neither currency shows strong upward or downward pressure at present.
What could change it:
- Upside risk: A significant improvement in China’s economic data could boost demand for Australian exports and strengthen the AUD.
- Downside risk: Continued weakness in Chinese economic indicators may further dampen demand for Australian goods, exerting downward pressure on the AUD.