The Australian dollar edged higher to around $0.654 on Tuesday, following a notable decline in the previous session, largely driven by renewed optimism over US President Donald Trump's willingness to further engage in trade discussions. Despite maintaining a firm stance on the upcoming 30% tariffs set to take effect on August 1, Trump indicated a readiness to resume negotiations with the European Union and other major trading partners, hinting at a potential diplomatic opening and easing investor fears of a deepening trade conflict. Domestically, sentiment was further buoyed by positive economic data, with the Westpac-Melbourne Institute Consumer Sentiment Index rising by 0.6% month-on-month to 93.1 in July 2025. This marked a third straight monthly gain, signaling a modest but encouraging improvement in consumer outlook. Investors are now turning their attention to key domestic data releases later this week, including consumer inflation expectations and the latest employment figures.