AUD Falls Amid Hawkish Remarks from RBA Governor Bullock

The Australian Dollar held onto its losses on Tuesday after Reserve Bank of Australia Governor Michele Bullock hinted at further rate hikes to combat high inflation. The AUD/USD pair fell around 0.3% and traded near the 0.6970 area following Bullock's remarks.

Bullock warned that underlying inflation remains too high, saying 'some further easing in the growth of demand is likely to be required' to return inflation sustainably to the RBA's target range of 2-3%. She added that the Board remains prepared to act, including by increasing the cash rate further if needed.

Despite the hawkish tone, concerns about additional tightening weakening domestic activity and the labor market weighed on the currency. In contrast, higher rates would normally support the Aussie.