AUD/TWD Outlook:
Slightly positive, but likely to move sideways, as the rate is well above its recent average with mixed drivers.
Key drivers:
• Rate gap: The Reserve Bank of Australia's interest rate hike aims to combat inflation, while Taiwan's Central Bank maintains a non-intervention approach, reflecting different monetary priorities.
• Risk/commodities: Ongoing optimism in U.S.-China trade may enhance demand for Australian commodities, benefiting the AUD amid recent fluctuations in the TWD.
• Macro factor: Falling consumer confidence in Australia could dampen economic growth expectations, creating uncertainty around the AUD's performance.
Range:
Expect the AUD/TWD to hold within its recent range, drifting cautiously as external factors influence movements.
What could change it:
• Upside risk: A stronger-than-expected rebound in Australia's economic indicators could increase demand for the AUD.
• Downside risk: A significant decline in consumer confidence or a worsening of global market conditions could pressure the AUD lower against the TWD.