08:58 AM EDT, 05/07/2024 (MT Newswires) -- The Australian dollar lost ground during the European trading session on Tuesday after the Reserve Bank of Australia left its cash rate target unchanged at 4.35%, as expected.

AUD/USD was at 0.6617 at mid-afternoon in the European session. It earlier fell from 0.6625 to 0.6600 on the decision before easing.

The RBA said Tuesday that inflation continues to moderate, but is falling more slowly than expected due in large part to services inflation that remains high and dropping only gradually.

James Kniveton, senior corporate FX dealer at Convera, commenting on the RBA's rate decision, said "it was a bit of 'buy the rumor and sell the fact,'" Reuters reported.

"They (the RBA) remain vigilant to upside risk, but the hawkish bias the markets expected has not eventuated," Kniveton was quoted as saying.