Australia, NZ dollars brace for volatility as rate risk looms

The Australian and New Zealand dollars were little changed on Tuesday as traders weighed upcoming inflation data and central bank decisions that could shape interest rates. Business Recorder reported the Aussie at $0.7020 after a 0.2% overnight decline, while the kiwi edged up to $0.5690 following a 0.3% loss.

Markets expect the Reserve Bank of New Zealand to raise its cash rate by 0.25 percentage points to 3.0% on Wednesday, with a 60% chance priced in for another increase in December. In Australia, third-quarter core inflation is forecast at 1.0%, leaving the annual rate at 3.6%; markets put the likelihood of a 25-basis-point RBA increase to 4.85% on November 3 at 66%. The report also noted September unemployment rose to 4.7%, a factor cited as potentially limiting further tightening.