Australia and New Zealand's currencies retreated against the dollar after a report the US is set to provide a decision on China tariffs as soon as next week.
AUD/USD fell 0.3% to 0.6602 after a report that Joe Biden's administration is set to impose new, targeted tariffs on key sectors including electric vehicles, batteries and solar equipment.
NZD/USD dropped 0.3% to 0.6015, mirroring a similar-sized drop in China's offshore currency.
"You can't say that this was not expected. Such trade-war era kind of tensions have been in the making ever since Trump spoke about imposing 60% tariffs," said Fiona Lim, a senior currency strategist at Maybank. "Should trade-war tensions really escalate, the Australian dollar would be worst hit alongside the New Zealand dollar and Taiwan dollar".
Market reactions to such US sanctions developments have been muted thus far this year, which could be due to China's control on the yuan limiting shocks to the currency, she added.
Bloomberg Dollar Spot Index edged up 0.1%, extending this week's 0.2% advance; 10-year US Treasury yields were little changed at 4.45%.
USD/JPY edged up 0.1% to 155.61, putting it on track for a weekly gain of 1.7%.
Source : Bloomberg
