The New Zealand dollar rose to around $0.595 on Tuesday, advancing for the third straight session to approach a four-week high, supported by a softer US dollar. The greenback remained under pressure amid rising expectations of deeper US rate cuts, following further signs of a weakening labor market. Fed funds futures are currently pricing in nearly a 90% chance of a 25 bps cut this month, with some traders also factoring in the possibility of a larger 50 bps move. Domestically, the Kiwi faced pressure from expectations of further monetary easing by the Reserve Bank. A sharp decline in second-quarter sales across multiple industries underscored growth risks and strengthened bets on another rate cut at the RBNZ’s October meeting, following last month’s cash rate reduction and guidance for more easing ahead. Elsewhere, subdued export data from China added pressure on the export-reliant currency, given New Zealand’s close trade ties with Beijing.

The South Korean won rose to around 1,385 per dollar on Tuesday, reversing losses from the previous session due largely to the dollar's weakness. Signs of a cooling US labor market strengthened Fed cut bets, pressuring the dollar and supporting Asian currencies. Domestically, sentiment was tempered after Seoul expressed deep regret over a US immigration raid at a Hyundai–LG battery plant, raising concerns about diplomatic friction for Korean firms in the US. Authorities pledged to safeguard corporate interests abroad, though investors remained cautious as the issue highlighted vulnerabilities in cross-border investment ties. At the same time, policymakers continued discussions with Washington on tariffs and investment rules, underscoring Seoul’s effort to safeguard national interests in trade negotiations. Markets also awaited key US inflation reports later this week that could guide the Fed’s policy outlook and the broader dollar direction.

The Australian dollar strengthened past $0.66 on Tuesday, marking its third consecutive session of gains and reaching its highest level in over a month. The rally was fueled by a softer greenback, as expectations mount for more aggressive interest rate cuts by the Federal Reserve. Markets are currently pricing in an 89% probability of a 25 bps cut at next week’s meeting, while some traders are even positioning for a larger 50 bps reduction. On the domestic economic front, the Westpac-Melbourne Institute Consumer Sentiment Index fell 3.1% to 95.4 in September, reversing a 5.7% jump in August that had lifted the index to its highest level since early 2022. The latest figure indicates that consumer pessimism continues to outweigh optimism, underscoring persistent concerns over domestic demand. Meanwhile, the NAB Business Confidence Index dropped to a three-month low of 4 in August 2025, from an upwardly revised 8 in the previous month — the highest reading since August 2022.