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US-China Trade War Sinks AUD, Global Stocks

The rising tension between US and China in trades has sent almost every major asset sinking, including oil, global stocks and Australian dollar.

The Trump administration announced that it will impose a 10 per cent tariff on $US200 billion worth of Chinese goods, including consumer items such as clothing and refrigerators. This decision followed China’s implementation of reciprocal tariffs on $US34 billion in US import goods.

The Dow Jones was down 0.9 per cent to 24,700, while the S&P and Nasdaq closed 0.7 per cent and 0.6 per cent lower respectively.

Chinese stocks declined by 1.6 per cent, while European markets such as Paris, London and Frankfurt lost between 1.3 and 1.5 per cent each. Japan’s Nikkei also dropped by 1.2 per cent, and Hong Kong’s Hang Seng dipped 1.3 per cent.

Gold fell 0.9 per cent to $US1,244.4 per ounce, while brent crude oil was down 6 per cent to $US74.17 per barrel.

Australian dollar plunged 1.2 per cent to 73.65 US cents, and is expected to continue declining. “We remain of the view that trade tensions are likely to get worse before they get better and as such we still see more downside risk for the Australian dollar,” NAB’s senior foreign exchange strategist Rodrigo Catril told the ABC.

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