AUD/ZAR Outlook:
The AUD/ZAR exchange rate is slightly positive but likely to move sideways. Currently, it is above its recent average, but without a strong driver, it may not see significant movement.
Key drivers:
• Rate gap: The recent interest rate hike by the Reserve Bank of Australia indicates a more aggressive stance compared to the South African Reserve Bank's recent rate cut.
• Risk/commodities: Rising global gold prices bolster ZAR, benefiting South Africa's export earnings, yet high oil prices remain volatile and could affect risk sentiment.
• Macro factor: Improved economic indicators from China are likely to support the Australian economy by increasing demand for exports, thereby strengthening the AUD.
Range:
The AUD/ZAR rate is expected to hold within recent levels, showing stability within its existing range.
What could change it:
• Upside risk: A continuation of strong commodity trends in Australia, driving demand for the AUD.
• Downside risk: Increased geopolitical tensions that could sour risk appetite, negatively impacting the AUD.