The Dollar edged down on Tuesday following Monday’s rally, but remained close to a one-month high.

Whereas the Australian Dollar soared following a rate hike by the central bank, up as much as 1% to an intra-day high of $0.6952, and at the time of writing stood at $0.6932.

The Reserve Bank of Australia (RBA) increased its cash rate by 25 basis points on Tuesday and said additional increases would be required, Reuters reports.

“By stating that, in its view, inflation will stay high for a protracted period, the RBA is undermining any thoughts of easing later this year or early next,” according to Rob Carnell, ING's regional head of research, Asia-Pacific.

“This will lift longer-term bond yields and short-term rate expectations. It will give the AUD (Australian Dollar) a boost too,” he added.

Additionally, markets were recovering from the U.S. jobs report published last Friday, revealing non-farm payrolls rose by 517,000 jobs last month.

Elsewhere, the Pound rose 0.2% to $1.2046 after falling to a one-month low of $1.2006 in the previous session.

The Euro moved up 0.08% to $1.0735, after falling to $1.0709 on Monday, the lowest seen since 9th January, the Reuters report adds.

Furthermore, the New Zealand Dollar was up 0.29% to $0.6323, not too far away from Monday’s one-month low of $0.6271.

“Since last Friday, (when) the U.S. reported a stronger than expected jobs number, this has reversed expectations that the Fed would pivot in its monetary policy,” stated Tina Teng, market analyst at CMC Markets.

“I don't think the jobs number is key … but it's definitely a major impact on (the Fed's) monetary policy.”

The surge in the greenback drove the U.S. Dollar index close to a one-month high on Monday of 103.76, and at the time of writing was down 0.13% at 103.47.