The AUDUSD opened lower at 0.6946, the NZDUSD opened lower at 0.6571 this morning.
The AUDUSD and NZDUSD were under selling pressure overnight as the trade war between the United States and China escalates, with each country raising tariffs on the other’s goods. The AUD and NZD are sensitive to the global growth outlook.
China plans to impose higher tariffs on USD$60 billion worth of US goods, after the US announced a tariff hike on USD$200 billion of Chinese products on Friday. China retaliated despite US President Trump’s warning against such action.
Global risk aversion spiked higher on fears the trade dispute between China & the USA could escalate further, and derail the global economy in the process. The VIX, a gauge of investor anxiety, spiked to its largest gain for the year, while global equity markets were hit hard with over USD$1 trillion wiped from stock values.
The GBP weakened, notwithstanding reports the British parliament might still reach a cross-party consensus on a Brexit deal, as trade fears dominated.
Global equity markets were sharply lower on the day - Dow -2.7%, S&P 500 -2.8%, FTSE -1.6%, DAX -1.5%, CAC -1.2%, Nikkei -0.7%, Shanghai -1.2%.
Gold prices gained 1.1% to USD$1,299 an ounce on safe-haven demand. WTI Crude Oil prices fell 1.3% to US$60.900 per barrel on fears the trade dispute will weigh on global growth, which overshadowed news that two Saudi Arabia oil tankers were among vessels attacked near the Strait of Hormuz, a vital oil export waterway.
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