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UBS Comments on The Australian Dollar After Central Bank's Surprise Hold on Rates

BY MT Newswires | ECONOMIC | 07/09/25 08:23 AM EDT

08:23 AM EDT, 07/09/2025 (MT Newswires) -- The Reserve Bank of Australia (RBA) surprised market participants by holding the cash rate steady at 3.85% on Tuesday, said UBS.

Also, for the first time, the RBA published the vote count, which showed a 6-3 split, wrote the bank in a note to clients.

The AUDUSD rallied by 0.7%-0.8% after the decision, nearing its year-to-date high of 0.659, pointed out UBS.

Governor Michele Bullock emphasized the RBA remains on an easing path, but a better-than-feared global outlook and a slight uptick in monthly consumer price index data saw most of the board opting for a wait-and-see approach with payrolls data on July 17 and Q2 CPI

on July 30.

UBS now expects the RBA to cut rates in August, November 2025 and February 2026, while previously it was July, August and February, though the bank continues to see the terminal rate at 3.1%, which is 0.1 percentage point above money market pricing.

UBS remains bullish on the AUDUSD.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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