The Australian dollar rose to around $0.656 on Tuesday, reaching its highest level in nearly three weeks as a softer US dollar provided support. The greenback weakened ahead of Wednesday’s Fed meeting, with markets pricing in a 25 bps rate cut, while optimism over a potential US-China trade deal also weighed on safe-haven demand. In Australia, attention now turns to Wednesday’s release of Q3 inflation data and the September monthly CPI report, which could offer further insight into the trajectory of interest rates. Market expectations for a rate cut have dropped sharply, with only a 15% probability currently priced in, down significantly from 60% after RBA Governor Michele Bullock reiterated that the labor market remains “a little tight,” despite unemployment rising more than the RBA had projected.