Aussie dollar drops further as Trump escalates trade war with China

---

The Aussie dollar is lower after US President Donald Trump hit China with tariffs on another $US200 billion worth of Chinese goods this morning.

Also read: Top 10 best home loan providers revealed

A short time ago, the AUD was back below 0.7150 US cents, after reaching an overnight high of 0.7195.

Here's the price action on a five-minute chart:

The AUD is the worst performer among the commodity bloc, with smaller falls for the Canadian loonie and the Kiwi dollar.

Elsewhere in currency markets, moves have been relatively muted so far in response to Trump's announcement.

The US dollar has made up some ground against the other major currencies, but not enough to offset its overnight falls.

Also read: Here’s where Aussie property markets are heading now

Trump's tariffs are scheduled to go into effect from September 24, starting at a rate of 10% before increasing to 25% by the end of the year.

Asian markets will be now be on edge awaiting China's response. During his announcement this morning, President Trump said that if China retaliates he will immediately pursue tariffs on another $US267 billion worth of Chinese goods.

The greenback edged higher against the off-shore traded Chinese yuan, with markets watching for the daily yuan-fix by Chinese policy makers at 11:15am AEST.