The Australian and NZ dollars climbed against their major counterparts in the Asian session on Tuesday, as a dramatic U-turn in British fiscal policy lifted risk sentiment.

Investors cheered British finance minister Jereme Hunt's decision to scrap most of the policies announced in the mini-budget last month.

"We remain completely committed to our mission to go for growth, but growth requires confidence and stability - which is why we are taking many difficult decisions, starting today," Hunt said in a speech to the House of Commons.

British Prime Minister Liz Truss has apologized for the tumultuous first few weeks of her leadership, but insisted she is going nowhere and would lead the Conservative Party into the next general election.

In economic news, minutes from the Reserve Bank of Australia's October 4 meeting showed that members agreed that it was necessary to again hike its benchmark lending rate in the face of soaring inflation

At the meeting, the RBA raised its benchmark rate by a quarter-point - lifting the cash rate target by 25 basis points to 2.60 percent from 2.35 percent. This was the highest rate since mid-2013. The board also increased the interest rate on exchange settlement balances by 25 basis points to 2.50 percent.

Data from Statistics New Zealand showed that New Zealand consumer prices were up 7.2 percent on year in the third quarter of 2022.

That exceeded estimates for an increase of 6.6 percent and eased slightly from 7.3 percent in the previous three months.

The aussie climbed to a 4-day high of 0.6331 against the greenback and near a 2-week high of 94.17 against the yen, reversing from its early lows of 0.6277 and 93.46, respectively. The aussie is seen facing resistance around 0.685 against the greenback and 98.00 against the yen.

The aussie rose back to 0.8651 against the loonie, from a low of 0.8617 hit at 5:15 pm ET. Next immediate resistance for the aussie is seen around the 0.90 level.

In contrast, the aussie remained lower against the euro, with the pair trading at 1.5653. The next possible support for the currency is seen around the 1.61 level.

The kiwi appreciated to near a 2-week high of 0.5704 against the greenback and near a 4-week high of 84.88 against the yen, following its previous lows of 0.5623 and 83.83, respectively. The kiwi may challenge resistance around 0.62 against the greenback and 87.00 against the yen.

Recovering from its prior lows of 1.7468 against the euro and 1.1165 against the aussie, the kiwi firmed to a 4-day high of 1.7283 and near a 2-month high of 1.1073, respectively. Should the kiwi strengthens further, it is likely to test resistance around 1.68 against the euro and 1.09 against the aussie.

Looking ahead, German ZEW economic sentiment for October is set for release in the European session.

At 8:15 am ET, Canada housing starts for September are scheduled for release.

U.S. industrial production for September and NAHB housing market index for October will be out in the New York session.

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