The Aussie Dollar was softer on Tuesday following the central bank’s decision to hold rates steady.

The Reserve Bank of Australia (RBA) held the cash rate at 4.10%, stating “higher interest rates are working to establish a more sustainable balance between supply and demand in the economy and will continue to do so.”

Pound Sterling Live reports that the market was divided 50/50 on whether the central bank would hike rates again following last month’s increase.

The decision led to a broadly weaker Australian Dollar.

At the time of writing, the Pound to Australian Dollar exchange rate rose 0.25% at 1.0960 amid a broadly softer Aussie Dollar.

Whereas the Australian Dollar to US Dollar rate edged down 0.20% at 0.6660, and the Euro to Australian Dollar rate stood at 1.6371.

The Reserve Bank added that “uncertainty” remains in regard to supply and demand, and the decision to hold “provides the Board with more time to assess the state of the economy and the economic outlook and associated risks.”

The likelihood of further rate hikes from the central bank seems more remote following this month’s pause and associated guidance, says RBC Capital Markets.

“The onus remains on the data to weaken and probably more materially (given the global inflation trends) to keep the RBA on hold. The bar to hike looks a little higher from this statement,” according to Elsa Lignos, Global Head FX Strategy at RBC Capital Markets.

However, analysts are not ruling out the chances of a further rate hike, yet in terms of the Australian Dollar, it looks as though the peak is close.

“Our base case remains the RBA will increase its cash rate to 4.35% in August so long as the Australian economic data (employment, inflation and retail) evolves in line with our view. AUD/USD can drop a little further in the London session as investors digest the RBA’s decision,” stated Commonwealth Bank of Australia analyst Joseph Capurso.