UBS: Pound and Australian dollar expected to pump as UK and Australia's Central Bank may be more cautious in cutting interest rates

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On November 21st, Jin10 Data reported that analysts at UBS Global Wealth Management stated that the British pound and the Australian dollar may pump, as the Bank of England and the Australian Reserve Bank may take a more cautious approach to interest rate cuts than other regions. They stated in their 2025 outlook report that the combined situation of inflation and economic rise should make these two banks adopt a more cautious approach when cutting interest rates. Analysts view the pound and the Australian dollar as their preferred developed market currencies in interest rate trading. Interest rate trading involves borrowing low-yielding currencies to raise funds to buy high-yielding currencies. UBS expects the AUD/USD exchange rate to rise from the current 0.6507 to 0.68 by December 2025, and the GBP/USD exchange rate to rise from 1.2628 to 1.35.

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