The NZD/USD currency pair continued its downward trajectory, slipping to around 0.5625 during the early Asian session on Friday, as growing concerns surrounding U.S. tariffs weighed on the New Zealand Dollar (NZD). Market focus is now shifting to the upcoming release of the U.S. Personal Consumption Expenditures (PCE) Price Index for January, which could further influence market sentiment later in the day.
On Thursday, U.S. President Donald Trump announced that a 25% tariff on goods from Mexico and Canada would come into effect on March 4. Additionally, a 10% duty would be imposed on Chinese imports, as Trump cited the ongoing issue of illegal drugs entering the U.S. from these countries. The new tariffs would be in addition to a 10% tariff imposed on China in early February, bringing the cumulative tariff rate on Chinese goods to 20%. These tariff announcements have sparked renewed concerns, particularly for the New Zealand Dollar, given China’s significant role as New Zealand’s major trading partner.
Further influencing market sentiment, the U.S. Bureau of Economic Analysis (BEA) reported on Thursday that U.S. GDP grew at an annual rate of 2.3% in the fourth quarter, matching the initial estimate and meeting market expectations. The Greenback strengthened following the release of the data, contributing to additional pressure on the Kiwi.
As tariff tensions continue to impact the market, the NZD/USD pair remains vulnerable to further declines, particularly if U.S. trade policies continue to escalate.
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