Commonwealth Bank of Australia's rise in home loan rates lit up currency trading desks on Thursday afternoon, sending the dollar plunging half a cent, as traders bet the move will raise pressure on the Reserve Bank to ease monetary policy.

The Australian currency experienced its first major action of the day when the Commonwealth Bank followed Westpac to raise it rates for variable home loans. It lifted by 15 basis points rather than 20 as Westpac did, but the dollar plunged half a cent to the day's low of US71.8¢.