Dollar Hits Two-Month High as RBA Hikes Rates Amid Inflation Pressures

The US dollar held near a two-month high on Tuesday, while the Australian dollar slipped after the Reserve Bank of Australia (RBA) delivered its widely expected 25-basis-point hike.

Markets had largely priced in the move and were more sensitive to the RBA's guidance than the rate increase itself. The RBA pointed to persistent inflation pressures, including an underlying inflation rate of 3.6%, as well as higher energy costs and weak productivity as key risks.

The Australian dollar weakened after the hike, with AUD/USD around $0.69, falling below the $0.70 level that had recently provided support.