Investing.com - The U.S. dollar slipped while the Aussie dollar edged higher on Monday as markets awaited an announcement of additional U.S. tariffs on $200 billion in Chinese goods.
The U.S. Dollar Index, which tracks the greenback against a basket of other currencies, traded 0.04% lower to 94.47 by 12:35AM ET (04:35 GMT).
Reports on the weekend suggested that U.S. President Donald Trump wants to move forward with tariffs on $200 billion in Chinese goods.
The tariff level will probably be about 10%, the Wall Street Journal reported, quoting people familiar with the matter. This is below the 25% the administration said it was considering for this possible round of tariffs.
"(The U.S. dollar) will take guidance this week from any trade discussion and bond and equity market movements," said Richard Grace, chief currency strategist and head of international economics at Commonwealth Bank of Australia.
Meanwhile, the AUD/USD pair gained 0.7% to 0.7160. The Australian dollar, which is a proxy for global growth and Chinese assets, was under pressure in recent months as Trump's tariff threats became a reality. The Australian currency plunged 9% so far this week and is one of the worst-performing major currencies this year. The Reserve Bank of Australia is set to publish the minutes of its latest policy setting meeting on Tuesday.
"This week, AUD/USD will take some guidance from the minutes of the (Reserve Bank of Australia's) September policy meeting on Tuesday. We don't expect much of a currency market reaction," said Grace.
Elsewhere, the USD/JPY pair was down 0.1% to 111.97. The Japanese stock market is closed in observance of Respect-for-the-Aged Day. A monetary policy announcement from the Bank of Japan is due this week, though no change is expected.
The USD/CNY pair gained 0.03% to 6.8732
"Further escalation looks very likely in which the rate will likely be raised to 25 percent and more US tariffs threatened, while China may potentially pull out of trade talks entirely and escalate on the new front of outright export restrictions," JPMorgan (NYSE:JPM) analysts said in a morning note.
"This would of course only inflame the situation further."