AUD/USD: RBA projects growth to return to its trend rate of 2% over 2025 – BBH

FXStreet Insights Team FXStreet

AUD/USD is firmer on US Dollar (USD) weakness, BBH's FX analysts report.

RBA remains cautious which offers AUD support

"Australia’s Q4 real GDP matched consensus. The economy grew 0.6% q/q vs. 0.3% in Q3. Both public and private expenditure contributed to the growth, supported by an increase in exports of goods and services. On an annual basis, real GDP was up 1.3% in Q4 slightly above the RBA’s 1.1% forecast. The RBA projects growth to return to its trend rate of 2% over 2025."

"RBA remains cautious which offers AUD support. Deputy Governor Andrew Hauser reiterated overnight that 'the Board does not currently share the market’s confidence that a sequence of further cuts will be required.'"

"Interest rate futures imply almost 75bps of easing in the next 12 months with the next 25bps cut priced-in for May as heightened trade tensions weighs on the global economic outlook."

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