The Australian dollar has held firm for much of the week but that has all came undone today after comments from a top US trade representative cast doubts on a potential trade deal between the US and China over the coming months.
The Aussie dollar had been riding high on the hopes that a deal would finally be reached as China is Australia’s biggest trading partner and stability in the world’s 2nd largest economy is good for the economy down under.
US Trade Representative Robert Lighthize noted that there was still a long way to go before a deal could be reached between the 2 countries and even if one was made, the US would have to keep the threat of sanctions on the table so China wouldn’t revert back to there old ways of Business.
“Much still needs to be done, both before an agreement is reached, and more importantly, after it is reached,” Mr Lighthizer said.
The Aussie may see more pain on another front as we move forward with reports that the Chinese are pulling their money out of the Australian property market after a slump in prices over the last year and with further losses expected, the trend is set to continue which is more bad news for the Australian dollar
Over the last year, house prices have tumbled in Australia’s 2 biggest cities with a 9.7 percent fall in Sydney and 8.3 percent slide in Melbourne which leaves Australia’s once booming property market in tatters.