The Australian dollar has fallen against the US dollar amid a drop in oil prices with a looming lift in crude output and a worsening of the trade war between China and the US.
At 0635 AEST on Tuesday, the Australian dollar was worth 74.12 US cents, from 74.18 US cents on Monday.
The US dollar earlier rose 0.2 per cent against a basket of major currencies, moving towards an 11-month high, Reuters reported.
But, Westpac analysts say, ended lower on the day, while the Australian currency was a distinct ‘underperformer’.
Investors, in the offshore session, steered away from risk, with Asian equities in retreat and US Treasury yields declining, after a report that President Donald Trump plans to bar many Chinese companies from investing in US technology firms and block more tech exports to Beijing.
Westpac analysts say China’s President Xi was reported as vowing it will ‘punch back’.
‘The US dollar index is down 0.3 per cent on the day. Outperformer EUR rose from 1.1630 to 1.1713, and was the main beneficiary of US dollar weakness.’ the analysts said in a morning note.
‘Underperformer AUD fell from 0.7440 to 0.7397.’
The analysts did not expect much from the local currency on Tuesday.
‘(The) AUD’s rebound was cut short by the deterioration in risk sentiment, (and) a 0.7375-0.7445 range suggested today.’
The Aussie dollar is also down against the yen and the euro.
CURRENCY SNAPSHOT AT 0635 AEST ON TUESDAY
One Australian dollar buys:
* 74.12 US cents, from 74.18 on Monday
* 81.34 Japanese yen, from 81.196 yen
* 63.32 euro cents, from 63.78 euro cents
(*Currency closes taken at 1700 AEST previous local session)