HKD/AUD Outlook:
The HKD/AUD exchange rate is likely to decrease as it is currently trading significantly below its 90-day average and near recent lows. Ongoing geopolitical uncertainties are pressuring the Australian dollar.
Key drivers:
• Rate gap: The Reserve Bank of Australia's recent interest rate hike suggests a stronger AUD compared to the stable position of the Hong Kong Monetary Authority.
• Risk/commodities: Weakening global risk appetite due to geopolitical tensions is leading to decreased investor confidence in the AUD.
• One macro factor: Stubborn inflation in Australia raises expectations for further rate increases, bolstering the AUD's strength.
Range:
The HKD/AUD rate is expected to drift lower within its recent three-month range, reflecting limited upward momentum.
What could change it:
• Upside risk: A sudden positive change in geopolitical conditions could enhance risk appetite, supporting the AUD.
• Downside risk: Fresh economic data indicating a slowdown in Australia may pressure the AUD further downwards.