Bearish investors have been dumping what they have in emerging markets around the world as the intensifying trade war between the US and China leaves smaller economies with weaker currencies, including Australia and New Zealand, taking the hit.

The Australian dollar bounced slightly above its lowest point since January 2017 on Monday. Closing at $0.7192, it climbed slightly from $0.7165 amid suggestions that it is less likely to attract interest as investors take shelter from worldwide market volatility.

The 1.8% drop in the Australian currency over just one week echoes problems seen in other emerging currency markets, including South Africa, Argentina and India. Indonesia and Turkey have also both hit the news for financial troubles in the last few weeks, leaving investors running to what they consider to be a safer dollar as markets around the world reel from clear knock-on trading effects.

Australia is in line with these countries market-wise due to its reliance on exports and foreign exchanges to help service debts and prop up national finances. Its neighbor New Zealand could also see itself put in the same basket as investors begin to worry about how China will respond to the tariffs levied on its own exports by the US.

Given that both countries rely on China significantly, the markets are watching closely to see how the trade standoff between the China and the US continues to develop, as Australia and New Zealand are relative proxies in gauging how the rest of the market reacts.

Analysts from the National Bank of Australia (NAB) have offered warnings, stressing that if US President Donald Trump follows through on his threat to implement an additional $200bn worth of tariffs on China, then this is likely to cause the Australian dollar to plummet.

Their note said that this could lead to the US dollar getting even stronger against its Australian counterpart, reaching “sub-US$0.70” if Trump carries out all the measures that he is currently proposing.

This would lead to a low for the Australian currency not seen since mid- to late-2016, and rumors even abound of it hitting the base of $0.69 last seen in 2015 and early 2016. At this point, analysts are pessimistic about the prospect of the Australian dollar turning around, calling the idea that it could bounce back up to anything near $0.75 “unlikely.”

So-called safer currencies have seen the kind of bounce that cements other countries as emerging markets still trying to maintain stability as worldwide discourse in the political sphere comes into play. The Swiss franc has gained 3.3% and the Japanese yen has gained 2% against the Australian dollar respectively.

Disappointing retail exports have further undermined the Australian economy, as July sales came in at zero growth, when estimates had predicted a bump of 0.3%. However, a rise in wage growth and company profits should contribute heavily to a 0.7% growth in GDP, expected to receive confirmation this week.

The New Zealand dollar is also in the crossfire, as it dropped 1% against the US dollar to hit $0.6605. New Zealand government bonds saw gains as their yield basis point rose by one.