AUD Sinks as RBA Hike Meets Strong US Yields

The Australian Dollar (AUD) took a hit on Tuesday after the Reserve Bank of Australia (RBA) raised its overnight cash rate by 25 basis points to 4.60%, its fourth hike this year.

The move was largely anticipated, leaving the AUD vulnerable to a sell-the-fact reaction, according to TASTYFX analysis.

The RBA remains concerned about persistent inflation, with core inflation around 3.6%, and is keeping the door open for additional tightening if price pressures don't ease.

The bigger force at play today was the US market, where the 10-year Treasury yield pushed towards 5.30% as markets assigned a 70% chance of another Federal Reserve hike in October, supporting the US Dollar even after weaker consumer confidence and softer job openings.