RBA Raises Cash Rate to 4.60% as AUD Falls Below 0.7000 Against USD

The Reserve Bank of Australia (RBA) increased its cash rate by 25 basis points to 4.60% on Tuesday, marking the highest level in about 15 years, according to Commerzbank. Despite the hawkish stance and signals of ongoing inflation concerns, the Australian Dollar weakened against the US Dollar, slipping below the 0.7000 level.

MUFG noted that the AUD/USD pair tested its 200-day moving average near 0.7030 before retreating further. ING highlighted that Governor Michele Bullock revealed policymakers had debated holding rates due to housing sector vulnerabilities and global risks, yet ultimately chose to proceed with the hike. Deutsche Bank emphasized that the RBA left the door open for further tightening as inflation remains elevated.

For Japanese investors, the move underscores ongoing volatility in commodity-linked currencies amid shifting global monetary policies, which may influence FX and equity strategies focused on the Asia-Pacific region.