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.