AUD Plummets Below 0.7000 After Dovish Tones from RBA

The Australian Dollar (AUD) fell below 0.7000 against the US Dollar (USD) after the Reserve Bank of Australia's (RBA) monetary policy decision failed to sustain an initial rally.

The RBA raised its Cash Rate by 25 basis points (bps) to 4.60%, but the hike was largely anticipated, and attention quickly shifted to RBA Governor Michele Bullock's press conference.

Bullock expressed hope that the four hikes delivered this year would be enough to slow inflation, suggesting that further tightening might not be necessary if prices ease.

The comments added a 'dovish taint' to the decision, according to FX Strategist Francesco Pesole at ING, while TD Securities views Tuesday's move as a 'risk management hike' rather than the start of a new tightening cycle.