Australian Dollar Loses to Raging USD Despite Hawkish RBA Rate Announcement


The Australian dollar surrendered early gains on Tuesday after the Reserve Bank of Australia (RBA) announced an expected 50 basis-points (bps) rate hike in the Australian session on Tuesday.

Expectations of a Solid Australian Dollar Comeback Cut Short

Analysts and traders had predicted a second consecutive 50 bps rate hike from the RBA. However, the rating announcement failed to deliver the hawkish outlook many had hoped for.

Meanwhile, the Japanese yen dropped to a 24-year low against the dollar as the greenback rode on the backs of a bump in US Treasury yields, while the euro extended its gains from a recent decline to a five-year low. At press time, AUD/USD trades at 0.86% in the red after falling to the $0.6780 mark earlier today.

shutterstock 2133638407 min

RBA Governor Philip Lowe noted before the meeting that the bank could choose between raising rates by 0.25% or 0.50%, although many believe the bank could raise rates more aggressively following the US Federal Reserve’s 0.75% rate hike in June. Westpac strategist Sean Callow explained:

“We got a small wobble in the Aussie as the statement appears to confirm that if the RBA board did debate an option other than the 50 basis points we got, it was the 25 basis points that Governor Lowe flagged a couple of weeks ago, and not 75 basis points.”

Callow added: “No last-minute FOMC-style swing to more aggressive tightening.”

In other news, the US Dollar Index (DXY) recorded a sharp 1.06% bounce in the European session on Tuesday to tap a new two-decade peak at 106.28. As mentioned earlier, the dollar’s bullish performance was sponsored by a rebound in the 10-year Treasury yield from its multi-week Friday low of 2.7910%.


You can purchase Lucky Block here. Buy LBlock

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$100 Min Deposit
  • Award-winning Cryptocurrency trading platform
  • 14 Cryptoassets available to invest in
  • FCA & Cysec regulated
$200 Min Deposit

Highly volatile unregulated investment products. No EU investor protection.

  • Trade top Cryptos such as Bitcoin, Litecoin and Ethereum plus more
  • Zero commissions and no bank fees on transactions
  • Around the clock service with support in 14 languages
$100 Min Deposit
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$200 Min Deposit
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
Share with other traders!

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.