AUD/CNY Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The Reserve Bank of Australia has recently raised interest rates, while the People’s Bank of China is maintaining a loose monetary policy, creating pressure on the CNY.
• Risk/commodities: Recent trends in global oil prices have supported demand for Australian commodities, positively impacting the AUD's performance.
• One macro factor: Australia's consumer confidence index has hit a 10-month low, indicating potential challenges for domestic economic growth.
Range:
AUD/CNY is likely to hold within the recent range, given the lack of strong directional drivers.
What could change it:
• Upside risk: A significant improvement in Australian consumer sentiment could boost demand for the AUD.
• Downside risk: A downturn in the commodities market or further easing by the PBOC may weaken the AUD against the CNY.
