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UBS Comments on The Australian Dollar as GDP Bounce Cements "Modest" Recovery View

BY MT Newswires | ECONOMIC | 09/04/25 12:12 PM EDT

12:12 PM EDT, 09/04/2025 (MT Newswires) -- Australia's Q2 gross domestic product rose 0.6% quarter over quarter and 1.8% year over year, beating market

expectations of 0.4% quarter over quarter, said UBS.

Growth in the previous quarter was also revised higher. Importantly, the key drivers of GDP are changing, with central bank (RBA) rate cuts supporting a recovery in private demand that is more than offsetting the slowdown in public demand, stated UBS.

Reserve Bank of Australia Governor Michele Bullock remarked that the GDP result was a little stronger than the RBA thought it would be, and it's possible that "if it keeps going, that there may not be many interest rate declines left."

After this week's data, the bank shifts its view to only one further rate cut of 25bps in November 2025. UBS also sees a lower chance of another cut in February 2026.

The bank continues to like selling the AUD/USD's downside and to be long the pair at 0.64 or below, with a target of 0.70 over 12 months.

Other pairs UBS would consider for a long Australian dollar (AUD) position include the AUD/CHF, AUD/CNY and AUD/NZD.

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

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