AUD/USD falls 0.4% to 0.6420 as RBA hikes rates to 3.85%

AUD/USD declined 0.4% (26 pips) to 0.6420 following the Reserve Bank of Australia's decision to raise interest rates by 25 basis points to 3.85%, signaling a higher-for-longer policy stance. Despite the hawkish move, the Australian dollar weakened as markets had already priced in the hike, with focus shifting to growth concerns. The RBA's statement highlighted persistent inflation risks while acknowledging economic headwinds. Australian equities faced pressure, particularly growth stocks, while precious metals rallied with gold reaching $2,042/oz. The rate differential between Australia and other major economies continues to support the Aussie longer-term, though immediate technical resistance at 0.6450 caps gains. Support levels emerge at 0.6400 psychological level and 0.6380 (January low). Traders await Friday's Australian retail sales data for further direction, with the RBA's hawkish tilt suggesting limited downside for AUD crosses despite today's weakness.