"The US-China tariff war is also stoking concern over whether China will allow the yuan to devalue."If it does, it will cause mayhem, including for the Aussie dollar,"he said.
"For anyone planning a trip to the US, the more relevant time period is 2002-2003 — the last time the Aussie dollar's purchasing power against the US dollar was so weak,"Mr Callow noted.
"But, if the hit to Australian growth and financial markets is larger than expected from US and reciprocal tariffs, we may see a faster and more aggressive cutting cycle this year."
"The impacts on China and Australia will be lessened if the Chinese authorities ramp up policy stimulus,"CBA economists said.