UBS says the Australian dollar is well-positioned to benefit from a broad rotation out of the U.S. dollar, with strategists identifying the AUD/USD as an attractive long opportunity at current levels.
The recent rebound in the greenback dragged the pair down from a nine-month high near 0.66 to just below 0.6430. While AUD/USD has since recovered to around 0.65, UBS believes the current level still offers compelling value for medium-term upside.
- see current levels as an attractive to go long
- a target of 0.70 as early as Q1 2026
A key support for the Aussie, according to UBS, is the less aggressive easing path expected from the Reserve Bank of Australia. The bank forecasts 75 basis points of rate cuts from the RBA through Q1 2026, versus 100bps from the U.S. Federal Reserve—preserving some relative yield advantage for the AUD.
UBS also pointed to Australia’s deep and liquid bond market as an added draw for investors seeking to diversify currency exposure.
This article was written by Eamonn Sheridan at investinglive.com.