AUD/ZAR Outlook:
The outlook for AUD/ZAR is bullish, as the rate is above its recent average and near recent highs, supported by strong commodity demand.
Key drivers:
- Rate gap: Australia's Reserve Bank has raised interest rates, enhancing the appeal of the Australian dollar compared to the South African Reserve Bank's maintenance of higher rates.
- Risk/commodities: The Australian dollar benefits from high global commodity prices, with strong demand for exports like iron ore and coal boosting market confidence.
- One macro factor: Recent inflation data in Australia has surged, increasing expectations for further monetary tightening by the RBA.
Range:
AUD/ZAR is likely to hold steady within its recent trading range.
What could change it:
- Upside risk: A further increase in commodity prices could strengthen the AUD even more.
- Downside risk: A significant drop in global risk appetite could lead to a pullback in AUD demand.