The NZD/USD pair is trading flat at 0.5650 in the Asian session on Wednesday, having pared earlier gains. Despite a positive surprise in China’s Services Purchasing Managers’ Index (PMI), which rose to 51.4 in February from 51.0 in January, the New Zealand Dollar remains largely unchanged. The data exceeded expectations of 50.8, signaling strength in the Chinese economy. Given New Zealand’s close trade ties with China, this improvement could have implications for the NZD, although the currency has shown little immediate reaction.
In a significant development, Adrian Orr, the Governor of the Reserve Bank of New Zealand (RBNZ), has announced his resignation. Orr expressed satisfaction in leaving the position with inflation under control and the New Zealand economy in a cyclical recovery following the COVID-19 pandemic. Deputy Governor Christian Hawkesby will serve as the acting governor until March 31, after which New Zealand’s Finance Minister will appoint an interim successor.
On the global stage, the US Dollar is facing headwinds as concerns over slowing economic growth persist, compounded by the effects of rising tariffs. President Trump’s 25% tariffs on imports from Canada and Mexico were implemented on Tuesday, along with a 20% tariff hike on Chinese goods. These measures have contributed to increased pressure on the USD.
U.S. Commerce Secretary Howard Lutnick indicated in a Fox News interview that the U.S. administration might reconsider its tariff stance, particularly if the USMCA trade deal provisions are followed. However, sources within the White House suggest that President Trump remains committed to maintaining the tariffs, as reported by The New York Times.
Meanwhile, the US Dollar Index (DXY), which measures the currency’s strength against a basket of six major currencies, is hovering around 105.70, reflecting ongoing uncertainty. Market expectations are mounting that Trump may eventually soften his approach on trade tariffs, which could weigh further on the USD.
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