The Australian dollar has fallen following a move by the Reserve Bank of Australia (RBA) to cut interest rates.

At 7:00 a.m. local time (AEST) on Wednesday, the Australian dollar was trading at 74.85 U.S. cents, down from 75.92 U.S cents on Tuesday.

By 9:30 a.m. local time (AEST), the Australian dollar had risen slightly to 74.99 U.S. cents.

Commonwealth Bank of Australia senior currency strategist Elias Haddad said in a note on Wednesday the Australian dollar continued to adjust lower overnight following Tuesday's RBA decision to cut the cash rate by 25 basis points to 1.75 percent.

He noted broad-based U.S. dollar strength and falling commodity prices undermined the Australian dollar.

"The RBA provided no future guidance as to whether they would follow-up with another interest rate cut," Haddad said.

"But we anticipate that another 25 basis points interest rate cut will follow at the August meeting, which comes after the Q2 inflation data."

He believed improvements in the Australian economy, recovery in commodity prices and the peak in the United States would support the Australian dollar in time.

"Overall, we are holding our currency forecasts and continue to look for the Australian dollar at 78 U.S. cents at year-end and 80 U.S. cents by mid-June 2017," Haddad added.

"Nevertheless, in the short-run, as the market continues to react to the RBA further, short-term declines in the Australian dollar are possible."