SYDNEY(Reuters) - The Australian and New Zealand dollars slipped on Thursday as risk assets fell out of favour, with investors fretting over the bitter U.S.-China trade feud's impact on world growth.
The Australian dollar <AUD=D4>, often played as a liquid proxy for global trade prospects, eased 0.2 percent to $0.7249 and well off a 2-1/2 month top of $0.7338 set last week.
The New Zealand dollar <NZD=D4> slipped 0.4 percent to $0.6808, drifting away from a high of $0.6883 touched earlier this month.
Top of investors' concerns is the Sino-U.S. trade war, followed by weakening outlook for corporate profits, a steep sell-off in tech stocks, and rising U.S. 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 U.S. 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 U.S. consumer's state of mind."
The Aussie and the kiwi had gained last week on a weakening greenback after the U.S. Federal Reserve sounded cautious about the world economy, leading markets to suspect the U.S. 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 2.25-2.50 percent.
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 Organization meeting with a U.S. 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 U.S. trading partners by erecting a tariff wall against imports of steel and aluminium - justified by U.S. national security concerns - and has slapped heavy tariffs on Chinese goods amid accusations of China stealing U.S. 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.
(Reporting by Swati Pandey, editing by Eric Meijer)
