AUD/INR Outlook:
The AUD/INR rate is currently above its recent average, reflecting strong labor market data and increased demand for Australian exports. This positions the pair for a slightly positive outlook but likely to move sideways without a clear new driver.
Key drivers:
• Rate gap: The Reserve Bank of Australia's potential interest rate hikes contrast with India's more flexible exchange rate policy, supporting the AUD.
• Risk/commodities: Rising commodity prices driven by China’s recovering economy are lifting the AUD, while geopolitical tensions are creating uncertainty for the INR.
• One macro factor: Improving consumer confidence in Australia may reinforce the AUD's strength, providing domestic support for the currency.
Range:
AUD/INR is likely to drift within the current range, not extending to its recent highs or lows in the short term.
What could change it:
• Upside risk: Strong Australian PMI data could further boost confidence in the AUD.
• Downside risk: Escalating geopolitical tensions involving India may exert pressure on the INR, influencing the AUD/INR negatively.
