The Australian dollar was steady Friday, only slightly changed against the US dollar at 72.52 cents.

The local currency slipped Thursday as risk assets fell out of favour, with investors fretting over the bitter US-China trade feud’s impact on world growth.

The Australian dollar, often played as a liquid proxy for global trade prospects, eased 0.2 per cent to 72.49 US cents on Thursday and well off a two-and-a-half month top of 73.38 set last week.

Top of investors’ concerns is the China-US trade war, followed by weakening outlook for corporate profits, a steep sell-off in tech stocks, and rising US interest rates which when combined threaten to weigh heavily on global growth.

“Risk sentiment looks to be the current main driver for both antipodean currencies, thus focus is now likely to shift towards Black Friday … which marks the traditional start to the US holiday shopping season,” said Rodrigo Catril, Sydney-based senior forex strategist at National Australia Bank.

“Amid concerns of a slowing economy and softer equity market, the level of shopping on Friday is likely to be treated as an important gauge of the US consumer’s state of mind.”

The Aussie had gained last week on a weakening greenback after the US Federal Reserve sounded cautious about the world economy, leading markets to suspect the US tightening cycle may not have much further to run.

But investors still see a chance for a hike next month that will take the Fed funds rate to 2.25 to 2.50 per cent.

The leaders of the United States and China are due to meet later this month at the G20 Summit in Argentina, amid low expectations of a trade breakthrough.

“On that front the news flow is not that reassuring,” Catril noted.

The United States and China clashed on Wednesday at a World Trade Organisation meeting with a US envoy accusing Beijing of using the WTO to pursue “non-market” policies and a Chinese official saying it was Washington that was flouting the rules.

President Donald Trump has angered US trading partners by erecting a tariff wall against imports of steel and aluminium – justified by US national security concerns – and has slapped heavy tariffs on Chinese goods amid accusations of China stealing US intellectual property.

The Australian dollar faces a number of tests in coming weeks, with third-quarter construction work and capital expenditure on Wednesday and Thursday followed by the all-important third-quarter gross domestic product due the week after.

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