AUD/XPF Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average and lacking a clear driver.
Key drivers:
• Rate gap: The Reserve Bank of Australia has raised interest rates to combat inflation, creating a positive spread over other currencies, including the CFP Franc.
• Risk/commodities: Ongoing demand for key Australian exports like iron ore is supporting AUD, especially with recent stability in global commodity prices.
• Macro factor: Consumer inflation expectations in Australia may ease, which could slightly dampen AUD's strength.
Range:
Expect the AUD/XPF pair to likely hold within its recent range, showing stability between the highs and lows seen in the last three months.
What could change it:
• Upside risk: A stronger global economic recovery that boosts demand for Australian commodities could drive the AUD higher.
• Downside risk: A significant decline in global tourism affecting the economies tied to the XPF may weaken its position against the AUD.