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The Australian dollar came off its high as risk sentiment got a knock amid worries about global growth and worsening trade relations between the United States and China.

The Australian dollar was last at 72.84 US cents on Monday after climbing to a two-and-a-half month peak of 73.38 US cents on Friday. It slipped 0.5 per cent overnight for its worst single-day performance since November 12.

The losses came alongside a sell-off in global equity markets with the main Wall Street indices tumbling between 1.6 and 3.0 per cent due to a cocktail of factors, including rattled investor confidence in the long high-flying tech sector.

The Aussie is often traded as a liquid proxy for global growth as Australia’s export-driven economy is largely dependent on world trade.

The spectre of escalation in the China-US tariff war has weighed on the Aussie for much of this year.

‘There are renewed concerns about US-China trade tension … adding to more generalised concerns over global growth,’ ANZ said in a note to clients.

Reserve Bank of Australia (RBA) Governor Philip Lowe singled out global trade protectionism as a ‘significant’ risk to world growth, in minutes released on Tuesday of the central bank’s November 6 policy meeting.

Trade relations between the world’s two biggest economies seemed to have worsened over the weekend when US Vice President Mike Pence said in a blunt speech there would be no end to US tariffs on $250 billion of Chinese goods until China changed its ways.

The domestic outlook appears rosier though with the RBA striking an upbeat tune as it flagged a possible ‘pronounced decline’ in unemployment in the minutes.

Still, there was no case for an increase in interest rates from the current record low of 1.50 per cent as wage growth and consumer prices were still tepid.

‘It seems clear from the text that the Reserve Bank Board is comfortable with how things have played out over 2018 and is comfortable with current interest rate settings,’ said Ryan Felsman, Sydney-based senior economist at CommSec.

In a note, he said while no change in the official cash rate is expected until later in 2019, ‘just like Reserve Bank Board members, we are closely watching trends in the job market and wages.’

Later in the day, RBA’s Lowe will give a talk in Melbourne titled ‘Trust and Prosperity’.