AUD/FJD Outlook:
Bullish, as the AUD is above its recent average and at multi-month highs.
Key drivers:
• Rate gap: The Reserve Bank of Australia is raising rates to combat inflation, while the Reserve Bank of Fiji's rates remain low, supporting AUD strength.
• Risk/commodities: The price of key Australian exports is rising, which boosts demand for the AUD.
• One macro factor: Australia's CPI data exceeded expectations, increasing prospects for further monetary tightening.
Range:
The AUD/FJD is likely to drift within its recent range, influenced by ongoing developments in inflation and interest rates.
What could change it:
• Upside risk: Stronger commodities demand could push the AUD even higher.
• Downside risk: Deteriorating market conditions or global trade tensions could weaken the AUD.