The Australian dollar slipped toward $0.63 on Friday, reversing earlier gains from the week as global trade tensions intensified. Uncertainty surrounding President Trump’s shifting tariff policies led to a selloff in risk assets, with investors fearing potential economic disruptions.

Despite the decline, the Aussie remains on track for a nearly 2% weekly gain, supported by a broader weakness in the U.S. dollar. Stronger-than-expected Australian GDP growth and trade figures also helped stabilize sentiment, reinforcing optimism about the country’s economic outlook.

Meanwhile, Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser highlighted the need for caution in monetary policy decisions. He noted that while inflation has shown signs of easing, it is still too early for the central bank to consider aggressive rate cuts.

The ongoing trade war between the U.S. and its global partners remains a key risk factor for financial markets. If tensions continue to escalate, the Australian dollar could face renewed selling pressure, as investors seek safer assets like the U.S. dollar.

Looking ahead, traders will closely watch upcoming economic data and policy signals from the RBA. With market volatility on the rise, the Aussie dollar’s trajectory will likely depend on developments in global trade negotiations and interest rate expectations.