AUD Soars as RBA Hikes Rates Amid Inflation Fears

The Australian Dollar gained ground after recovering daily losses and trading around 0.7020 during Asian hours on Tuesday.

This came after the Reserve Bank of Australia decided to raise the Official Cash Rate by 25 basis points to 4.60% from 4.35% at its September monetary policy meeting, aligning with market expectations.

The AUD/USD pair depreciated due to the US Dollar's momentum driven by elevated oil prices stemming from ongoing uncertainty surrounding US-Iran negotiations.

Persistent pressure on energy costs has heightened market expectations that the Federal Reserve will need to tighten monetary policy further to keep inflation in check, pushing US Treasury yields to fresh multi-year highs with 10- and 30-year yields surging above 5%.