AUD/USD Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average, yet lacks a clear driver.
Key drivers:
- Rate gap: The Reserve Bank of Australia has raised rates to tackle inflation, while the Federal Reserve has paused its rate cuts, widening the gap in interest rates between the two countries.
- Risk/commodities: Recent turbulent conditions for oil prices may influence commodity-related currencies, including the AUD, which can fluctuate with demand for Australian exports.
- One macro factor: Declining consumer confidence in Australia could weigh on economic activity, making the AUD vulnerable if conditions worsen.
Range:
The AUD/USD is likely to hold steady within its recent range, lacking clear momentum to rise significantly or fall sharply.
What could change it:
- Upside risk: A sustained improvement in consumer sentiment or stronger-than-expected economic data could boost the Aussie.
- Downside risk: Further declines in consumer confidence or unexpected weak US economic reports may pressure the AUD lower.
