AUD/XPF Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average but lacking a clear driver for significant movement.
Key drivers:
- The Reserve Bank of Australia is poised for potential rate hikes in 2026 due to rising inflation risks, which could support the Australian dollar.
- Oil prices have remained above average, positively impacting Australia’s export earnings and, subsequently, the AUD.
- Weak demand for Australian exports from China is currently restricting the upside potential of the AUD due to its commodity-driven economy.
Range: The AUD/XPF is expected to hold within its recent range as it trades firmly above the 90-day average but lacks momentum to test the highs.
What could change it:
- Upside risk: A strong increase in Australia's upcoming inflation figures could drive the AUD higher.
- Downside risk: Continued weak demand from China could exert downward pressure on the AUD, affecting its value against the XPF.