Overseas vacations become even more expensive with the Australian dollar falling for almost 10 years.
The local exchange rate fell to $ 66.90 on Monday morning after US President Donald Trump called on US companies to stop trading with China, Australia's largest trading partner.
At the beginning of August, the currency fell below 67 US cents for the first time since March 2009, and it did so again after the Australian stock market lost $ 33 billion within minutes of opening.
In more bad news for holidaymakers, ANZ head of foreign Daniel Been said that the Australian dollar would probably fall to 65 cents by the end of this year, as the financial markets were worried about the US-China trade war.
Overseas vacations become even more expensive with the Australian dollar falling for almost 10 years
& # 39; Any form of uncertainty in global geopolitics clearly plays a major role in how currencies & # 39; s trade, as people try to understand the impact that will have on global confidence and ultimately global growth & # 39 ;, he told Daily Mail Australia on Monday.
& # 39; So for small, open economies with free-floating currencies like Australia, the market has seen it as a real challenge and we see weakness in the Australian dollar. & # 39;
President Trump's retaliation against China has caused fears that the emerging Asian superpower will purchase less Australian iron ore that is used to make steel.
A weaker Australian dollar immediately makes foreign holidays more expensive.
Currency traders usually sell the Australian dollar if they think that China will buy less Australian iron ore, which is used to make steel.
The currency's fortunes are also tied to risk sentiment on financial markets.
The local exchange rate fell to $ 66.90 on Monday morning after US President Donald Trump called on US companies to stop trading with China, Australia's largest trading partner
The fall of the Australian dollar coincided with the Australian Securities Exchange, which lost more than $ 33 billion within minutes.
The reference ASX200 index was 1.5 percent weaker, just 15 minutes after the start of trading on Monday morning and dropped 97.7 points to 6,425.4 points.
Australian equities in every sector, except gold, reacted negatively to President Trump who called on US companies to stop trading with China.
& # 39; The huge amounts of money that China has earned and stolen from the United States for years, year after year, will have to and must STOP &, he tweeted Friday.
& # 39; Our large American companies are hereby instructed to immediately look for an alternative to China.
The Australian stock market lost more than $ 33 billion within minutes of opening as the US-China trade war escalated
The Australian Securities Exchange followed Wall Street in negative territory, with the S&P 500 losing 2.6 percent while the Dow Jones industrial average fell 2.4 percent during Friday trading in the United States.
CommSec market analyst Steven Daghlian said that the retaliation of President Trump against China's new rates on US goods has soured the financial markets.
& # 39; It will be difficult for the Australian market to organize a major recovery, I would imagine & # 39 ;, he told Daily Mail Australia on Monday morning.
& # 39; The fact that the US-China conflict has escalated in recent days has not helped.
Australian equities in every sector except gold responded negatively to US President Donald Trump's call for US companies to stop trading with China, Australia's largest trading partner
& # 39; We have all sectors in the negative territory, almost all stocks have fallen – the only bright spot is really the golden subsector, which is doing well. & # 39;
The final round in the trade war escalated Friday after China imposed new rates of five to 10 percent on US imports, from cars to soybeans and oil.
President Trump echoed in kind with various tweets after the US stock market had already dived.
In August alone, Australian equities are already 5.7 percent weaker and the financial markets are worried about the effect of the US-China trade war on global economic growth.
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