The Australian dollar held steady around $0.637 on Tuesday, near its lowest level in a year as investors remained cautious ahead of the U.S. Federal Reserve's upcoming policy decision. The Fed is widely expected to cut interest rates by 25 basis points on Wednesday, but may signal fewer cuts than previously indicated for 2025.

At home, a private survey showed Australian consumer confidence fell in December, as sentiment turned more pessimistic about the economic outlook. Additionally, traders are awaiting the Australian government's update on its budget outlook, which is expected to show a wider deficit, driven in part by weaker activity in China, Australia's largest trading partner.
Source: Trading Economics