The Australian dollar slipped on Tuesday after the country's central bank cut interest rates as expected while highlighting the economic risks from a global trade war, supporting market wagers for further easing ahead.

Australia’s central bank cut interest rates for a second time, citing easing inflation risks, but warned of ongoing shocks to the global economy from the U.S. trade policies and a deteriorating geopolitical environment.

Australia’s central bank on Tuesday reduced its benchmark interest rate by a quarter percentage for a second time this year, to 3.85% after inflation fell within a target range. The Reserve Bank of Australia reduced its cash rate from 4.