The NZD/USD currency pair is trading cautiously around 0.5695 in the early hours of Thursday’s Asian session, with New Zealand’s currency facing downward pressure. This comes in the wake of ongoing tariff concerns linked to US President Donald Trump’s recent trade policies. Investors are also looking ahead to the preliminary fourth-quarter GDP report due later today, which may provide further direction.
President Trump has already implemented higher tariffs on Chinese imports and threatened to extend such measures to goods from Canada and Mexico, including a potential 25% border tax. He has also called for an investigation into copper imports, which could lead to additional tariffs. Renewed threats of US tariffs on Chinese imports could negatively impact the NZD, given China’s significance as a major trading partner for New Zealand.
Further complicating the outlook for the Kiwi is the expectation of additional rate cuts by the Reserve Bank of New Zealand (RBNZ). ASB chief economist Nick Tuffley forecasts a 25 basis point rate cut at both the April and May meetings, which would likely weigh on the NZD’s performance.
On the flip side, the weakening US Dollar, exacerbated by disappointing economic data from the US, may provide some support for the NZD. February’s US consumer confidence, for instance, saw its largest decline since August 2021, dropping to 98.3 from 105.3 in January, according to the Conference Board. Traders will be paying close attention to speeches from Federal Reserve officials later today, including Michelle Bowman, Beth Hammack, and Patrick Harker, as they may offer insight into the Fed’s future interest rate policies.
Related topics:
USD/CAD Holds Steady Above 1.4200 Amid Trump Tariffs and Market Focus on Economic Data
Gold Price Near Record High as Tariff Threats Fuel Safe-Haven Demand
