The Australian dollar has flatlined as White House officials sow confusion about their trade intentions toward China, leaving the market in a holding pattern.
The Aussie was steady at 74.11 US cents, after drawing bids around 73.97 US cents overnight. It had retreated from a top of 74.43 US cents on a report the Trump administration planned to restrict Chinese investment in US technology.
President Donald Trump himself later denied the report, while administration officials offered conflicting signals on exactly what was planned.
"It's been a very messy past 24 hours or so," said David de Garis, a senior analyst at National Australia Bank.
"Endeavouring to work out the end game and winners/losers at this point in the war of words is premature," he added.
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"But trade frictions and trade access with China in focus has rightly centred some renewed selling attention on the AUD (Australian dollar)."
Australia is a major exporter of commodities to China, which makes its economy and currency vulnerable to any threat to free trade.
The growing risk of a trade war is one reason markets have priced out much chance of a rate hike for months to come.
Just last week the head of the Reserve Bank of Australia (RBA) Philip Lowe again made it clear that rates were heading nowhere, leading the interbank market to push a hike ever further into the future. A rise in the 1.5 per cent cash rate is only priced as a 50-50 chance by August 2019.
