The Australian dollar rose to around $0.69 on Tuesday, ending a two-session decline, as the Reserve Bank of Australia implemented an expected interest rate hike. The central bank raised the cash rate by 25 bps to 3.85%, marking its first increase since November 2023 and positioning the RBA as the first major central bank to pivot from a post-COVID easing cycle to tightening. The decision was unanimous, reflecting a broad set of data in recent months indicating that inflationary pressures intensified in the second half of 2025 and are likely to remain above the target range for some time. The RBA also noted that private demand is growing faster than anticipated, capacity constraints are more pronounced than previously assessed, and labor market conditions remain relatively tight. Market attention now turns to Governor Michele Bullock’s post-meeting press conference, where her commentary and updated economic forecasts are expected to provide further insight into the RBA’s policy outlook.