Reserve Bank of Australia (RBA) Assistant Governor Sarah Hunter cautioned on Tuesday that higher US tariffs will exert a significant drag on the global economy. She emphasized that a weaker global growth environment is expected to moderately reduce prices for tradable goods.
Hunter further warned that increased uncertainty could suppress investment, output, and employment levels. “Higher global uncertainty has a large negative effect on Australian business investment,” she noted.
Despite these challenges, Hunter expressed confidence that Australia’s exporters are relatively well-positioned to withstand the adverse impacts. She also assumed that Chinese authorities would bolster their economy through fiscal stimulus measures.
Following these remarks, the Australian Dollar weakened, with the AUD/USD pair trading about 0.45% lower on the day at 0.6470.
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