The Australian dollar jumped higher against the US dollar following Tuesday’s RBA decision to leave interest rates on hold.

From 70.75 US cents before the rates decision, the AUD was trading at 71.2 cents minutes later.

Stephen Koukoulas, managing director of Market Economics, said he was surprised to see such a strong movement in the currency given the highly anticipated nature of the RBA decision.

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“The sharp move probably reflects global hedge fund activity. They use the Australia dollar to gain exposure to China, so if they were shorting the dollar there may have been some covering trades going on,” he said.

Mr Koukoulas said next week’s ABS jobs data would likely cause the next major move in the Australian dollar.

The Australian dollar has fallen from 105 US cents to around 70 cents over the past two-and-a-half years.