It had been easing over several days, dropping for a three days in succession, as speculation mounted about a lower interest rate.

Indeed, the $A fell to US84.7c during trading on Tuesday morning to its lowest exchange rate for a year - down from US85.3c on Monday.

But all that changed quickly on Tuesday afternoon - the $A bounced back sharply against the $US, after the earlier announcement, reaching US85.1c by mid-afternoon.

The earlier fall in the $A flowed mainly from widespread anticipation that central bank would cut interest rates today, for the first time since 2001.

So farmers would have benefitted from both the cut in interest rates and from the slide in value to the $A.

But a sharp turnaround after release of the RBA news is seen as a signal that monetary exchange investors were backing away from their bets of more interest rate cuts to come.

Some analysts had viewed the RBA's note of caution about rising inflation as a pointer that further interest rate cuts, widely forecast, aren't a certainty.

Even with the rebound of the $A late on Tuesday, the $US remains below that of last week's.

The share market went the other way, with the benchmark S&P/ASX-200 share index pulled lower by the major banks following their own rate cut announcements.

The index was recently trading at 5,111 points, down about 7 points for the day, a drop of about 40 points after the rate announcements.