AUD/ZAR Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
- Rate gap: The Reserve Bank of Australia recently raised interest rates, which typically supports the AUD against the ZAR, where rates remain high but stable.
- Risk/commodities: The recent increase in oil prices supports the ZAR, as South Africa is a key player in commodity exports, impacting its currency's strength.
- China's economic impact: Continued demand for Australian commodities from China appears to be stabilizing, but uncertainty remains about global economic conditions.
Range:
The AUD/ZAR is expected to hold within its recent 3-month range, given the stable trading environment.
What could change it:
- Upside risk: A further increase in Australian interest rates could drive the AUD higher.
- Downside risk: A decline in commodity prices may weaken the ZAR, pulling the AUD/ZAR lower.