UBS sees AUD/USD poised to rally, eyes zero.70 goal by early 2026

UBS says the Australian greenback is well-positioned to learn from a broad rotation out of the U.S. greenback, with strategists figuring out the AUD/USD as a horny lengthy alternative at present ranges.

The current rebound within the buck dragged the pair down from a nine-month excessive close to zero.66 to simply under zero.6430. Whereas AUD/USD has since recovered to round zero.65, UBS believes the present stage nonetheless provides compelling worth for medium-term upside.

• see present ranges as a horny to go lengthy
• a goal of zero.70 as early as Q1 2026

A key help for the Aussie, in accordance with UBS, is the much less aggressive easing path anticipated from the Reserve Financial institution of Australia. The financial institution forecasts 75 foundation factors of fee cuts from the RBA via Q1 2026, versus 100bps from the U.S. Federal Reserve—preserving some relative yield benefit for the AUD.

UBS additionally pointed to Australia’s deep and liquid bond market as an added draw for traders in search of to diversify forex publicity.

This text was written by Aaron Cutchburt at investinglive.com.