The Australian Dollar consolidates for the fourth straight day versus the US Dollar, yet registers modest gains of 0.11%, as price action shifts to choppy ahead of the Federal Reserve’s monetary policy decision.

The Australian Bureau of Statistics (ABS) will publish the September Consumer Price Index (CPI) on Wednesday at 00:30 GMT. The report is expected to show that inflation rose 4.2% from a year earlier, higher than the 4% posted in  August.

The Mexican Peso makes a U-turn and depreciates by 0.60% against the US Dollar, with the latter strengthening against a basket of six currencies, known as the US Dollar Index (DXY).

Societe Generale’s Kit Juckes highlights the New Zealand Dollar as the most attractive G10 currency into this week’s central bank meetings. Markets see an almost certain RBNZ hike, with expectations for two more moves by mid-2026.

The US Dollar (USD) has added to Monday’s optimism, advancing to the area of fresh two-week highs on the back of mixed US Treasury yields and the continuation of the pre-Fed cautious stance in the global markets.

The USD/CHF advances for the third straight day, registering modest gains of 0.09% on Tuesday, with the pair recovering some ground after hitting a monthly low of 0.8191 last Friday. The pair exchanges hands at 0.8282 with buyers eyeing the 0.8300 mark.

AUD/USD edges higher on Tuesday as hawkish Reserve Bank of Australia (RBA) expectations help the Australian Dollar (AUD) outperform its major peers.

Scotiabank strategists Shaun Osborne and Eric Theoret highlight Euro (EUR) weakness versus the stronger US Dollar (USD), driven by French bond underperformance and poor confidence data. They note EUR/USD is trading below minor support, with key support at 1.1113 now exposed.

The Pound Sterling dives for the fourth straight day against the US Dollar, down 0.14% as the Greenback registers mild gains ahead of the Federal Reserve’s monetary policy decision on Wednesday. GBP/USD trades at 1.3321 and remains capped within the 1.3307-1.3349 range on Tuesday.

EUR/USD remains on the back foot on Tuesday as the Euro (EUR) underperforms across the board amid concerns over France’s public finances, while a firmer US Dollar (USD) adds pressure. At the time of writing, the pair trades around 1.1145, extending losses for a fifth consecutive day.

Scotiabank strategists Shaun Osborne and Eric Theoret report USD/CAD trading flat with the Canadian Dollar (CAD) underperforming other commodity currencies but gaining versus major peers.

MUFG’s Halpenny warns that Brazil’s election-driven market sell-off could fuel further volatility, while a right-leaning Congress may force President Lula da Silva to compromise on policy.

USD/JPY edges higher on Tuesday as last week’s AI-related worries subside, reducing the Japanese Yen’s (JPY) safe-haven appeal and helping the US Dollar (USD) resume its uptrend ahead of the Federal Reserve’s (Fed) monetary policy decision on Wednesday.

Commerzbank FX analyst Michael Pfister reviews the recent sharp depreciation of the Mexican Peso (MXN) against the US Dollar (USD) and argues that the move looks overdone. He highlights Banxico’s dovish stance, USMCA trade uncertainties and rising risk aversion as key drivers.

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann report that GBP/USD broke below prior support at 1.3340, with intraday downside momentum modest but sufficient to keep price action constrained between 1.3315 and 1.3365.

Societe Generale strategists highlight severe pressure on the Brazilian Real, which will resume trading at 5.4155 after an 8.5% drop driven by unwinding of long positions.

EUR/GBP edges lower on Tuesday amid a mixed market mood, with the British Pound (GBP) outperforming the Euro (EUR) as France’s fiscal concerns weigh on the single currency. However, both currencies remain weak against their other major peers as traders brace for key events this week.

MUFG’s Derek Halpenny highlights continued Euro weakness, noting EUR remains the worst performing G10 currency this month despite a narrowing OAT/Bund spread and more supportive swap differentials. The analysis links renewed EUR/USD downside to rising natural gas prices and growing investor scepticism over the European economy’s ability to withstand the ongoing energy price shock.

Societe Generale’s Kenneth Broux and team note AUD/USD has defended its March uptrend near 0.6900 and is trading sideways around the 100-day moving average, outperforming G10 currencies ahead of Australian CPI and the RBNZ decision.

Brown Brothers Harriman’s (BBH) Elias Haddad describes a brutal election shock for Brazilian assets, with USD/BRL spiking before stabilizing and local equities and bonds plunging. He argues President Lula’s tolerance for higher debt may weigh on Brazilian markets, but notes conservative legislative constraints and Brazil’s attractive carry and commodity exposure as structural supports for the Brazilian Real.

Francesco Pesole at ING writes that the Euro is struggling as USD strength dominates, with EUR/USD still showing a short-term undervaluation largely linked to French risks.

The Euro (EUR) extends its losing streak against the US Dollar (USD) for the fifth trading day on Tuesday. The EUR/USD pair slumps to near 1.1140 as the Euro underperforms due to revival of concerns in French bond market.

Halpenny at MUFG notes renewed Japanese Yen weakness, with USD/JPY seen vulnerable to further gains as markets await comments from BoJ Governor Ueda.

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann observe that AUD/USD has stalled after testing 0.7040, with intraday momentum indicators turning flat and suggesting consolidation between 0.7005 and 0.7035. On a 1–3 week basis, prior upside bias is fading as the pair struggles to clear 0.7040, and a break below 0.6995 would negate prospects for a move toward 0.7070. Longer-term EMAs still point to downside risks toward 0.6923.

The GBP/USD pair drifts lower for the third straight day on Tuesday, extending its recent pullback from the highest level since September 16, around the 1.3420 area, touched last week.

ING’s Francesco Pesole expects the Reserve Bank of New Zealand (RBNZ) to deliver a 25bp rate hike to 3.0%, matching consensus and market pricing.

The Australian Dollar (AUD) marginally higher at around 0.7020 against the US Dollar (USD) during the European trading session on Tuesday. The Aussie pair edges up as the Australian Dollar outperforms, except the New Zealand Dollar (NZD).

HSBC’s FX Viewpoint notes recent Pound resilience, with GBP outperforming most G10 currencies over the past month.

TD Securities strategists see USD/BRL driven by Brazilian politics and fiscal concerns after Lula’s surprise election win.

The USD/CAD pair attracts some dip-buyers near the 1.4000 psychological mark on Tuesday, reversing a part of the previous day's modest losses amid a broadly firmer US Dollar (USD).