AUD/USD Reverses as Middle East Tensions Rise and US Data Disappoints

The Australian Dollar reversed its trend against the US Dollar on Tuesday due to growing uncertainty over the outcome of the Middle East conflict, which has pushed energy prices higher. This increase in energy costs may lead major central banks to tighten monetary policy, a scenario that could boost the value of the Greenback.

Investors' anxiety about the ongoing US-Iran tensions was reflected in the disappointing US economic data released on Tuesday. Housing Starts fell 12.4% from June's 1.415 million to July's 1.239 million, while Industrial Production slowed from the expected 0.3% to 0.2% MoM.

In Australia, traders will be watching the release of the Wage Price Index for the second quarter, which is forecast to remain unchanged at 0.8%. Meanwhile, Moody's rating agency has reaffirmed Australia's creditworthiness, maintaining a stable outlook and expecting real GDP growth of 1.9% this year and 1.6% in 2027.