On February 3rd, while the Federal Reserve was cutting rates and the European Central Bank was also easing, the Reserve Bank of Australia (RBA) stood alone in raising interest rates. At 11:30 today, the RBA announced its interest rate decision, hiking rates by 25 basis points and raising the cash rate from 3.6% to 3.85%. This marks the RBA's first rate increase since November 2023, making it the first major central bank to tighten monetary policy this year. The policy statement noted that the pace of growth in private demand has exceeded expectations, capacity pressures are greater than previously assessed, and labor market conditions remain tight. Based on this assessment, both inflation and employment have deviated from the RBA's expectations, making a rate hike imperative. The economic situation in the United States involves stable inflation but weak employment, prompting cautious rate cuts to stimulate jobs as the primary tool. In contrast, Australia's inflation is not stable and has strong upward potential; a single rate hike is unlikely to be sufficient to curb it, suggesting the possibility of multiple hikes through 2026. Within 30 minutes of the RBA's rate hike announcement, AUD/USD surged from 0.6964 to 0.7025, a gain of 61 pips, far exceeding market expectations. The divergence in monetary policy between the RBA and the Fed is the core driver behind the Australian dollar's appreciation. The Bank of Japan is also raising rates, but the yen continues to depreciate during its tightening cycle because Japan's absolute interest rate level remains low (0.75%) even after hikes, failing to effectively attract international capital inflows. The RBA's cash rate is already relatively high at 3.85%, exceeding the Fed's upper limit of 3.75%, making it significantly more attractive to international capital. Located in Oceania and having close trade ties with Asian nations, Australia is less affected by the various external policies associated with figures like Trump. This results in the RBA's macroeconomy operating somewhat independently, with weaker correlation to the economic cycles of the US and the Eurozone, making policy divergence a normal phenomenon. On the inflation data front, Australia's core CPI annual rate hit 2.8% in June 2025, the lowest since March 2022. Subsequently, the core inflation rate has risen steadily, reaching 3.3% by December 2025, exceeding the 2-3% band considered indicative of moderate inflation. For the RBA, failure to intervene early risks allowing inflation to climb even higher in the future. In terms of market performance, AUD/USD formed a long bullish candlestick during the session, nearly erasing all of last Friday's losses. The pair now faces resistance near the mid-term high of 0.7093, where selling pressure may intensify, while support exists from the lower boundary of the mid-term ascending channel. From a medium to long-term perspective, AUD/USD remains in an uptrend; however, since January 26th, the price has broken above the upper boundary of its long-term ascending channel, indicating signs of an accelerating rally.