The Australian dollar has tumbled to a 20-month low, and there are several reasons why it may drop even further this week.
Adding to the downward pressure was Canada and the United States ending their negotiations last week without agreeing to a new trade deal.
The Australian dollar was buying 71.9 US cents at 4:55pm (AEST).
Rate hikes around the corner
The Reserve Bank will announce its interest rate decision on Tuesday, but hardly any economists are expecting a rate hike in the foreseeable future.
The RBA is expected to keep the official cash rate on hold at the record low 1.5 per cent for the second year in a row.
But there is a much higher chance Commonwealth Bank, ANZ and NAB may impose out-of-cycle mortgage rate hikes.
NAB's senior foreign exchange strategist, Rodrigo Catril, believes there is some "likelihood that the other big three Australian Banks will sooner or later follow Westpac in lifting their variable mortgage rates … [and] the new week looks likely to be a tough one for the Australian dollar".
Beyond this week's trade and economic uncertainties, Commonwealth Bank is "mildly bearish" when it comes to the local currency.
The Australian dollar is "likely to modestly depreciate" due to the "US dollar strength", "concerns global economic growth may slow more rapidly", and "modestly declining commodity prices as Chinese economic growth slows", according to Joseph Capurso, CBA's senior currency strategist.
After all, the Federal Reserve has already lifted US interest rates twice this year to a target range of 1.75 to 2 per cent, as a vote of confidence on the surging US economy.
This means rates in the US are now higher than Australia, with higher rates attractive to big investors.
Analysts are expecting two more rate hikes for America by the end of this year, which could weaken the Australian dollar, making it an even less-attractive investment.
Trump and weak economic growth
In the next few days, Australians will get a clearer idea of how the economy is faring, with the release of GDP (Wednesday), trade balance (Thursday) and home loan figures (Friday).
"This week is a big one for domestic data, however, unless we get a very significant positive surprise, the Australian dollar will likely continue to struggle," said ANZ's head of foreign exchange research Daniel Been.
The consensus view is that Australia's economy should grow by 0.7 per cent over the quarter, which would knock the annualised pace of growth below 3 per cent.
Currency experts from the big banks are also bracing for US President Donald Trump to sink the Australian dollar further, especially if he continues to inflame trade tensions with Canada and China.
Mr Trump told US Congress, on Friday, he plans to sign a trade agreement with Mexico, after contentious negotiations with Canada failed to result in a trilateral deal to revamp the North American Free Trade Agreement (NAFTA).
The US President was also expected to formally impose 25 per cent tariffs on $US200 billion worth of Chinese imports on September 6, when the public comment period expires.
"The fragility of [emerging] markets amid rising uncertainty over President Trump's next move on trade policy means that the Australian dollar looks vulnerable to the downside," Mr Catril said.
What's the upside?
The weaker currency was no doubt disappointing news for Australians wanting to book overseas holidays.
With the benefit of hindsight, they would have received the best exchange rate on January 26, when one Australian dollar bought 81.09 US cents.
In the seven months since Australia Day, the local currency has fallen sharply by 11.4 per cent.
However, Commsec chief economist Craig James said the weaker Australian dollar, overall, may help protect the local economy from the uncertainties of Mr Trump's trade disputes with other countries.
"The lower Aussie dollar has improved our international competitiveness and is acting as a buffer against trade-war concerns," Mr James said.
"Globally focused businesses are benefitting from the weaker Aussie dollar and good global demand.
"The issue to watch is the 'US versus everyone' trade wars."