• The Australian Dollar appreciates after the domestic economic data release on Tuesday.
• Australia's Westpac Consumer Confidence increased by 2.8% in August, reversing the 1.1% decline observed in July.
• The pressure on US Dollar is alleviated due to diminished odds of a 50-basis point rate cut by the Fed.

The Australian Dollar (AUD) extends its gains against the US Dollar (USD) following key domestic economic data released on Tuesday. The AUD/USD pair may appreciate due to the hawkish sentiment surrounding the Reserve Bank of Australia (RBA).

Australia's Westpac Consumer Confidence rose by 2.8% in August, swinging from a 1.1% fall in July. Meanwhile, the Wage Price Index remained steady with a 0.8% rise in the second quarter, slightly below the market expectation of a 0.9% increase.

The AUD/USD pair receives support as the US Dollar (USD) faces challenges from expectations for a potential interest rate cut by the Federal Reserve (Fed) in September. However, this pressure might be alleviated due to reduced chances of a 50-basis point rate cut at the Fed's September meeting.

Traders will likely focus on US producer inflation data set to be released on Tuesday and consumer inflation figures on Wednesday. Traders are looking for confirmation that price growth remains stable.