Australian dollar steady
The local currency is fighting a rearguard action as a rout in global share markets and a new broadside on China-US trade sent investors to the cover of safe haven currencies.
The Aussie dollar was down Wednesday at 72.13 US cents, having shed 1.1 per cent overnight as investors fled currencies leveraged to commodity prices and global growth.
The failure at a top of 73.38 cents early in the week now risked a test of major support around 71.64 cents.
It also sank 0.9 per cent against the yen overnight and was last wallowing at 81.27 yen.
Wall Street fell sharply for a second straight session on Tuesday and strains appeared in US corporate debt and junk bond markets.
Adding to the gloom was a fresh scare over China-US trade as the White House on Tuesday said Beijing had failed to alter its “unfair” practices.
The report seemed to pour more cold water on hopes US President Donald Trump and Chinese President Xi Jinping would find some sort of truce at a G20 meeting next week.
“Comments out of the US don’t seem to be calming the trade feud,” said Rakuten Securities chief operating officer Nick Twidale.
“The Aussie looks set to suffer more today in it’s role as a risk proxy and expect more volatility in the emerging market space.”
“There are some signs that cracks in the US economy are starting to show, mainly in the credit market, and this is adding to all the geo-political and trade factors that are already causing concern,” he said.
Worries about the economic outlook in China had also slugged prices for iron ore and coking coal, two of Australia’s biggest export earners.
Australian government bond futures were little changed, with the three-year bond contract flat at 97.845.
The 10-year contract eased one tick to 97.2900.
Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.