• The Australian Dollar edges lower as rising Middle East tensions dampen the risk appetite.
• Australia’s Trade Balance stood at 5,644 million month-over-month in August, exceeding the expected 5,500 million and July’s 5,636 million readings.
• The Israeli Broadcasting Authority reported that the security cabinet would issue a strong response to the recent Iranian attack.

The Australian Dollar (AUD) edges lower against the US Dollar (USD) following the key economic data released on Thursday. Additionally, the risk-sensitive AUD/USD pair receives downward pressure as rising geopolitical tensions in the Middle East dampen the risk appetite.

Australia’s Trade Balance for August stood at 5,644 million month-over-month, surpassing market expectations of 5,500 million and slightly higher than July’s surplus of 5,636 million. However, both Exports and Imports declined by 0.2% month-over-month in August.

However, the downside risk for the AUD may be limited due to the hawkish outlook surrounding the Reserve Bank of Australia (RBA). Data released earlier this week showed stronger-than-expected retail sales growth for August, lowering the likelihood of an early rate cut by the RBA. Markets have almost fully discounted the possibility of a rate cut in November. Additionally, the AUD is supported by stimulus measures from China, Australia's largest trading partner, which have boosted commodity prices.

Traders are expected to closely monitor a series of key economic data from the United States (US) scheduled to be released on Thursday, including September's ISM Services Purchasing Managers' Index (PMI) and the weekly Initial Jobless Claims for the previous week.