Following the Reserve Bank of Australia (RBA) surprise rate hike announcement, Australian Treasurer Jim Chalmers said at a press conference on Tuesday, it is “not our expectation the economy will head into recession.”

Meanwhile., the RBA surprised the market by raising the cash rate 25 basis points (bps) to 4.10% on Tuesday, citing that "some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe.”

Market reaction

At the time of writing, AUD/USD is consolidating RBA-inspired gains near 0.6670, still up 0.79% on the day.