AUD Makes Modest Gain After RBA Rate Hike

The Australian dollar attempted to recover from its seven-week low against the US dollar in Asian trading on Tuesday, following the Reserve Bank of Australia's decision to raise interest rates to their highest level since 2011.

In line with expectations, the RBA raised interest rates by 25 basis points to 4.60%, marking its fourth rate hike this year and bringing total increases to 100 basis points.

The AUD/USD rose 0.15% to $0.7029, from the day's opening level of $0.7019, with a low of $0.7008. The RBA stressed that inflation remains high and noted that some of the upside risks it identified in August have already begun to materialize.

The bank said further tightening in financial conditions was warranted, while keeping the door open to additional interest rate hikes if necessary. Reserve Bank of Australia Governor Michele Bullock is due to speak shortly at a press conference on the latest monetary policy decisions and economic developments.