Feb 7 Reuters The dollar eased on Tuesday after its rally the previous day, but still hovered near a onemonth peak as traders raised their bets on how high the U.S. Federal Reserve would need to raise interest rates to tame inflation.

The big mover on Tuesday was the Australian dollar , which surged as much as 1 to an intraday high of 0.6952, after the country39;s central bank raised cash rate by 25 basis points and said more increases would be needed, a more hawkish policy tilt than many had expected.

The currency was last trading at 0.69415.

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, said Rob Carnell, ING39;s regional head of research, AsiaPacific.

This will lift longerterm bond yields and shortterm rate expectations. It will give the AUD Australian dollar a boost too.

Focus on Tuesday will be on Fed Chair Jerome Powell39;s speech at the Economic Club of Washington, at which Commerzbank analysts expect him to sound hawkish, which might give the dollar another lift.

He has the chance to walk back some of the commentary that he made on Wednesday last week that prompted this dovish read, said Simon Harvey, head of FX analysis at Monex, but added that he does not expect any new messaging from Powell.

Markets have been recovering from the shock of Friday39;s U.S jobs report, which showed that nonfarm payrolls surged to 517,000 in January, pointing to a…