Trump tariffs spark five-year Aussie Dollar low | Australian Markets
The Australian greenback has hit a five-year low as China hits back towards Donald Trump’s trade battle.
The Aussie Dollar is flirting perilously close to 60 US cents, surpassing the low recorded at first of the Covid-19 pandemic.
Massive losses throughout world sharemarkets spell bother for superannuation balances.
The Australian Dollar is intently tied to the energy of the Chinese Yuan, as a result of the Australian economic system is strongest when China has loads of money to buy our merchandise. Beijing has responded to Trump’s tariffs, matching the 34 per cent tariff on Chinese merchandise.
However the US already had a 20 per cent levy in place, so successfully any product going from China to the US now has a 54 per cent tariff.
Since Trump’s sweeping world tariffs announcement on Wednesday, some $8.1 trillion has been wiped from share markets across the world.
The huge shake-up rocked US share markets, and the ASX is tipped to drop 4.29 per cent when it opens on Monday.
China described the US tariffs as bullying.
“It is a typical unilateral bullying practice that endangers the stability of the global economic and trade order. China firmly opposes this,” a Commerce Ministry spokesperson stated. The ministry additionally says it can file a World Trade Organisation lawsuit.
The enormous selldowns and loss of worth on sharemarkets instantly impacts Australians’ superannuation balances.
But the tariff combat will probably increase the case for more rate of interest cuts in Australia. Economists suppose the tariffs will sluggish growth within the Australian economic system, and push the RBA to offer more charge aid.
To finish the week, the Australian Dollar was fetching 60.46 US cents, a 4 per cent loss on Friday. The Aussie Dollar has not been that weak towards the Greenback since April 2020.
A weak Australian Dollar makes imported objects more costly.
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