AUD/USD extended upside on Tuesday morning following an over 1% surge yesterday as RBA announced a back-to-back hike of 25 basis points (bps), as expected, with a tight majority, and pushed the Official Cash Rate (OCR) higher to 4.1%. Australia’s central bank noted that the conflict in the Middle East has resulted in sharply higher fuel prices, which, if sustained, will add to inflation. Globally, the conflict in the Middle East poses substantial risks in both directions. A longer or more severe conflict could put further upward pressure on global energy prices; this will push up near-term inflation and could also increase inflation further out if it impairs supply capacity or price rises get built into longer term inflation expectations. RBA noted. Higher prices and prolonged uncertainty may cause growth to be lower in Australia’s major trading partners and also in Australia, it added. Meanwhile, AUD/USD is trading higher at 0.70 following Governor Michele Bullock’s press conference and also as greenback retreated slightly today.