The Antipodean currencies such as the Australia and New Zealand dollars strengthened against their major currencies in the European session on Tuesday, as European stocks traded higher as a two-day policy meeting of the U.S. Federal Reserve gets underway later today.

The Fed is widely expected to lower interest rates, but there remains some debate about the size of the rate cut.

CME Group's FedWatch Tool currently indicates a 65.0 percent chance of a half point rate cut and a 35.0 percent chance of a quarter point rate cut.

The U.S. retail sales data for August due later in the day may weigh on the Fed's interest-rate decision.

Regardless of the size of the cut, the U.S. central bank is still expected to continue lowering rates over the remainder of the year.

Gold was marginally higher, while oil extended overnight gains due to concerns surrounding Hurricane Francine's impact on U.S. Gulf of Mexico output.

In the Asian trading today, the Australia and the New Zealand dollars held steady against its major rivals.

In the European trading now, the Australian dollar rose to near 2-week highs of 0.6765 against the U.S. dollar and 1.6448 against the euro, from early lows of 0.6471 and 1.6500, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.68 against the greenback and 1.62 against the euro. Against the yen, the aussie advanced to a 4-day high of 95.32 from an early low of 94.71. On the upside, 99.00 is seen as the next resistance level for the aussie.

Against the Canada and the New Zealand dollars, the aussie climbed to nearly a 4-week high of 0.9191 and a 3-week high of 1.0913 from early lows of 0.9165 and 1.0885, respectively. The aussie is likely to find resistance around 0.93 against the loonie and 1.11 against the kiwi.

The NZ dollar rose to nearly a 2-week high of 0.6208 against the U.S. dollar, from an early low of 0.6183. On the upside, 0.63 is seen as the next resistance level for the kiwi.

Against the yen and the euro, the kiwi advanced to 4-day highs of 87.42 and 1.7929 from early lows of 86.85 and 1.7989. If the kiwi extends its uptrend, it is likely to find resistance around 92.00 against the yen and 1.76 against the euro.

Looking ahead, Canada CPI data for August, U.S. retail sales data for August, U.S. industrial and manufacturing production for August, business inventories for July and U.S. NAHB housing market index for September are slated for release in the New York session.

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