Ammon News - The dollar was steady near two-month lows on Tuesday as traders weighed tariff worries and the path to U.S. rate cuts, while the Australian dollar inched lower in volatile trading after the Reserve Bank of Australia delivered on an expected rate cut.

The RBA cut its cash rate by 25 basis points to 4.10% on Tuesday in its first easing since the 2020 pandemic, but was still cautious about prospects of further policy easing.

That left the Australian dollar 0.2% lower but steady at $0.63441 after an initial burst of choppiness following the policy decision. The Aussie touched a two-month high of $0.6374 on Monday.

"For the AUD, the depth of cuts matters more than timing," said Yuxuan Tang, global market strategist at J.P. Morgan Private Bank.

"Current levels suggest that the AUD has factored in tariff-related risk premiums. While we acknowledge potential drags from widespread tariffs, pricing appears comprehensive."

Data last week showed U.S. consumer prices increased at the fastest pace in nearly 18 months in January, reinforcing the Fed's message that it was in no rush to resume cutting rates amid growing economic worries.

The yen was steady at 151.61 to the dollar as Japan's solid October-December GDP data on Monday, coupled with recent inflation numbers, helped lift the currency. It is up nearly 4% against the dollar so far in 2025.

The dollar index , which measures the greenback against six other major currencies, was 0.1% higher at 106.83 but still near the two-month low of 106.56 it touched on Friday.

The euro was steady on the day at $1.04735, while sterling last bought $1.2608 as traders braced for talks in Saudi Arabia later on Tuesday aimed at ending the Ukraine war.

The New Zealand dollar fell 0.3% to $0.57195 ahead of the Reserve Bank of New Zealand meeting on Wednesday, where the central bank is widely expected to cut rates by 50 bps. Reuters