AUD/TRY Outlook:
Likely to increase, supported by the Australian dollar's strong performance vs. its recent average.
Key drivers:
• Rate gap: The Reserve Bank of Australia raised interest rates, while Turkey's central bank has recently cut rates, enhancing the yield appeal for AUD.
• Risk/commodities: Ongoing demand for Australian commodities has benefited the AUD, particularly as China maintains supportive economic policies.
• One macro factor: Recent data indicate that Australia's inflation has surged past target, reinforcing expectations for further interest rate hikes by the RBA.
Range:
Expect the AUD/TRY to test recent highs, which could reinforce upward momentum.
What could change it:
• Upside risk: A continuation of foreign investment flowing into Australian assets as commodity prices rise could strengthen the AUD further.
• Downside risk: A decline in consumer confidence linked to economic pressures in Australia may weaken the AUD, affecting its current bullish outlook.