UBS has upgraded its September 2026 AUD/USD forecast to 0.72 from 0.70, citing the Reserve Bank of Australia’s hawkish tone and upside inflation risks that emerged from last week’s policy meeting.
The RBA maintained its current interest rate levels during its meeting last week, prompting UBS to push back its projection for the first rate cut from November 2025 to February 2026. The investment bank also noted there is an increasing possibility that the central bank might remain on hold for an extended period.
Despite recent softening in consumer sentiment and labor market indicators, UBS expects Australia’s unemployment rate to have remained largely stable in September. The third-quarter Consumer Price Index data, scheduled for release on October 29, will be crucial for the RBA’s next policy decision at its November 4 meeting.
UBS now recommends long positions on the Australian dollar at current levels and suggests selling downside at 0.65 or below. The bank also identified several other currency pairs for potential long-Aussie positions, including AUD/CHF, AUD/CNY, and AUD/NZD.
The revised forecast reflects UBS’s assessment that Australia’s monetary policy will remain tighter for longer than previously anticipated, supporting the Australian dollar’s strength against the U.S. dollar through September 2026.
