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UBS Sees Australia's Central Bank Next Rate Cut in February 2026 Vs Prior View of November 2025

BY MT Newswires | ECONOMIC | 10/08/25 10:59 AM EDT

10:59 AM EDT, 10/08/2025 (MT Newswires) -- The Reserve Bank of Australia held rates steady last week and its hawkish tone and the upside risks to inflation mean UBS sees the next rate cut in February 2026 and not November 2025.

The bank also noted a rising chance the RBA will remain on hold for an extended period.

While consumer sentiment and labor market data have softened, UBS expects the unemployment rate to have remained broadly unchanged in September. Q3 consumer price index, due on Oct. 29, remains key to the RBA's

policy decision at the next meeting on Nov. 4.

The bank upgraded its September 2026 AUD/USD forecast from 0.70 to 0.72. UBS favors selling downside at 0.65 or below, and likes to be long the pair at these levels.

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

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Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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