SINGAPORELONDON, Nov 7 Reuters The dollar advanced on Tuesday as last week39;s rally in riskier currencies took a breather, while the Aussie dollar slid after the Reserve Bank of Australia raised rates but tweaked its outlook, spurring expectations that hikes are at an end.

The RBA raised interest rates by 25 basis points on Tuesday to combat stubborn inflation, as expected, but markets seized on a tweak to the language in the central bank39;s statement, and concluded further tightening was unlikely.

The Australian dollar sank as much as 1.06 to a low of 0.642 and was last at 0.6434. The currency was on course for its biggest oneday percentage decline in a month.

Commonwealth Bank of Australia39;s currency strategist Carol Kong said RBA39;s forward guidance was slightly watered down, which was perceived as dovish, resulting in the Aussie quickly giving back its gains after an initial kneejerk rally.

The Aussie had been among the beneficiaries of last week39;s weakening dollar and touched a threemonth peak on Monday after U.S. data from Friday showed job growth slowed in October.

That led markets to price in rate cuts by the middle of next year, building on a move lower in U.S. Treasury yields, and lifting risk appetite.

With the RBA out of the way, the major determinants of AUDUSD will shift back to global. Expect focus to move back to Fed rhetoric and the resultant impacts on U.S. Treasuries, Kong said.

The rally in bonds and equities last week looks to be…