The Australian dollar is on the defensive at the end of a tough week as concerns swirled over Sino-US trade talks and global growth, while investors also pondered the possibility of rate cuts at home.

The Aussie dollar was pinned at 70.86 US cents, having been as low as 70.77 at one stage.

It was down one per cent on the week so far.

Sentiment took a knock when US Commerce Secretary Wilbur Ross said the United States and China were ‘miles and miles’ from resolving trade issues, though there was a fair chance a deal would be done eventually.

A 30-member Chinese delegation plans to come to Washington next week for talks, as the world’s two largest economies try to meet a March 1 deadline to resolve their trade disputes.

The Aussie had already been under fire after National Australia Bank became the last of the four major to hike its variable mortgage rates, fuelling speculation the RBA might have to ease to counter this private-sector tightening in financial conditions.

That was seen as a body blow to an already reeling housing market and led investors to narrow the odds on a reduction in the 1.5 per cent cash rate.

Futures imply around a 64 per cent probability of a quarter-point cut by December.

‘Given the shift in risk factors over the past couple of months the local rate market is correctly concluding that it’s worth spending a few basis points to hedge against a move,’ said Sean Keane at Triple T Consulting.

‘Our expectation is that the RBA will resist cutting for as long as possible,’ he added ‘We think the most likely timing for that will be at the November Board meeting.’

The RBA is hardly alone in facing pressure on policy.

European Central Bank President Mario Draghi on Thursday acknowledged that economic growth in the euro zone was likely to be weaker than earlier expected due to the fall-out from factors ranging from China’s slowdown to Brexit.

‘The read through was very much that a previously-posited rate rise after the summer now looks a very distant prospect,’ said David de Garis, director of economics at NAB.

‘It’s always a worry too when central banks assert that the risk of recession is low.’