FX.co ★ Aussie Dollar Rebounds on RBA Rate Hike

The Australian dollar climbed to approximately $0.69 on Tuesday, reversing its two-day decline, following the Reserve Bank of Australia's anticipated interest rate hike. The central bank increased the cash rate by 25 basis points to 3.85%. This marks the RBA's first rate increase since November 2023, making it the first major central bank to transition from post-COVID easing to tightening measures. The decision was made unanimously, underpinned by a range of data from recent months highlighting intensified inflationary pressures during the latter half of 2025, which are projected to exceed the target range for an extended period. Additionally, the RBA observed that private demand is outpacing expectations, capacity constraints are more significant than previously evaluated, and the labor market remains relatively tight. Attention now shifts to Governor Michele Bullock’s press conference after the meeting, where her remarks and updated economic projections are anticipated to offer deeper insights into the RBA’s policy direction.