AUD/USD drops 60 pips as US-China trade deal falls apart

• AUD/USD slides as White House advisor announce the termination of a trade deal with China. 
• Investors shun risk, sending the futures on the S&P 500 down by 1%. 

The Aussie dollar and other risk assets are falling fast in response to comments by White House advisor Peter Navarro that the trade deal with China is over. 

AUD/USD has declined by over 60 pips in just five minutes to hit session lows near 0.6860. Meanwhile, futures tied to the S&P 500 have declined by 1% and the US dollar is drawing bids against most majors except the anti-risk Japanese yen. 

 President Trump has decided to terminate the China trade deal in light of the growing evidence that the coronavirus pandemic originated in a Wuhan laboratory, Navarro told Fox News on Monday. ""It's over, they came here on January 15th to sign that trade deal, and that was a full two months after they knew the virus was out and about," said Navarro. 

The termination of the trade deal could lead to the revival of the trade war between the world's two biggest economies at a time when the global economy is facing coronavirus-induced recession. As a result, risk aversion could worsen during the day ahead, leading to a stronger sell-off in the AUD and other high beta currencies. 

The US and China signed a long-awaited "phase one" trade agreement at the White House in January, ending an 18-month long conflict. 

Technical levels