**Australian Dollar to US Dollar Forecast: UBS Predicts Gradual AUD/USD Recovery as RBA Stays Cautious**
*Based on content by James Elliott, ExchangeRates.org.uk, with expanded analysis and supplementary information.*
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The Australian dollar (AUD) has experienced volatile movements against the US dollar (USD) in recent months, shaped by shifting central bank policies, fluctuating commodity prices, and broader geopolitical and economic uncertainty. According to a recent outlook by UBS, as reported by James Elliott for ExchangeRates.org.uk, the Australian dollar is poised for a measured recovery against the US dollar, but the pace of gains will be restrained by the Reserve Bank of Australia’s (RBA) ongoing cautious stance.
This article provides a comprehensive breakdown of UBS’s forecasts for the AUD/USD exchange rate through to the third quarter of 2026, supplementing the analysis with context from other financial sources to give a rounded perspective for traders, investors, and businesses managing currency exposure.
## RBA’s Stance: Patient Policy and Dovish Signals
The Reserve Bank of Australia has been deliberate and measured in communicating its monetary policy intentions during 2024. The central bank has been mindful of balancing the need to support economic growth with the imperative of bringing down inflation to its target band.
Key points about the RBA’s position:
– The RBA has largely refrained from aggressive rate hikes, preferring a gradual tightening approach as inflation remains elevated but shows signs of moderation.
– Policy statements highlight concerns over weak wage growth domestically and global risks, including slowing demand from China, Australia’s largest trading partner.
– The central bank continues to emphasize data dependency, noting that future adjustments will be determined by incoming economic indicators, particularly inflation, labor market data, and international developments.
– RBA Governor Michele Bullock has repeatedly stated that while inflation is moving in the right direction, risks persist, and policy decisions will reflect these uncertainties.
The RBA’s relatively dovish tone, compared to more hawkish stances from the Federal Reserve and other major central banks over the past year, has influenced the dynamics of the AUD/USD exchange rate.
## UBS’s Forecasts: AUD/USD Set for Stepwise Gains
UBS, one of the world’s leading wealth management and investment banking firms, has released its forecast for the AUD/USD pair, anticipating a steady if unhurried recovery for the Australian dollar in the coming quarters.
### Key UBS Forecast Points
– UBS expects AUD/USD to reach 0.72 by the third quarter of 2026.
– The forecast projects a gradual appreciation from its current levels, as both global and domestic factors improve.
– The pace of this appreciation is forecasted to be incremental, as the RBA’s cautiousness will likely limit rapid gains.
– UBS underscores that the Australian economy is positioned to benefit from eventual global recovery, but near-term headwinds remain.
### Supporting Factors in the UBS Outlook
Several factors inform UBS’s optimistic, yet restrained, projections for the
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