Investing.com-- The Australian dollar weakened against the greenback on Tuesday after the Reserve Bank of Australia (RBA) lowered its benchmark interest rate by 25 basis points to 3.85%, citing rising global risks and a subdued domestic outlook.
The widely anticipated rate cut marks the RBA’s second easing move this year.
In its policy statement, the central bank noted that inflation is easing and projected to remain within its 2–3% target range, but warned that external uncertainties, including trade tensions and slowing global growth, could weigh on the economy.
Following the announcement, the Australian dollar’s AUD/USD pair fell 0.5% to $0.6423, down from $0.6459 earlier in the session.
Markets expect further rate cuts this year, with two more reductions likely as the RBA seeks to support growth amid external headwinds.