The Australian dollar has fallen to 72.28 US cents, down from 72.34 cents on Tuesday.

The local currency yesterday was hovering near one-week lows as markets were nervous before crucial trade talks between the leaders of the United States and China.

The Aussie dithered around US$0.7225, not far from last week’s low of US$0.7202.

The trade-sensitive currency has so far enjoyed solid gains in November, rising about two per cent as investors had hoped for some resolution in the bitter Sino-US tariff battle.

US President Donald Trump, however, put a damper on such optimism in an interview with the Wall Street Journal late on Monday.

He told the newspaper he expects to move ahead with raising tariffs on US$200 billion in Chinese imports to 25 per cent from 10 per cent currently.

He said it was “highly unlikely” he would accept China’s request to hold off on the increase, planned for January 1.

Trump and his Chinese counterpart Xi Jinping are set to meet later this week at the G20 summit in Buenos Aires.

Australia’s economy is heavily dependent on exports with its fortunes closely tied to China.

Rising global protectionism is bad for the country as well as its currency.

Apart from the Trump-Xi meeting, market focus will also be on a speech by US Federal Reserve Vice Chairman Richard Clarida later on Tuesday, ahead of an appearance by Chair Jerome Powell the day after.

Traders will assess whether “the less-hawkish tone continues to permeate Fed public appearances,” ANZ said in a note to clients.

“A soft tone may help AUD, but we still prefer to sell rallies.”

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