The NZD/USD pair edges higher, trading around 0.5655 in the early Asian session on Wednesday, as easing tariff concerns bolster the New Zealand Dollar (NZD). However, market participants remain cautious, closely watching developments regarding potential tariff policies. Later in the day, attention will turn to the release of the US Consumer Price Index (CPI) inflation data, which could influence market sentiment.
Federal Reserve (Fed) Chair Jerome Powell, in his prepared remarks for the first day of testimony before the Senate Banking Committee, emphasized that the Fed is in no rush to alter monetary policy. “We can maintain policy restraint for longer if the economy remains strong and inflation does not move toward 2%,” Powell stated. Despite this, his remarks failed to lift the US Dollar (USD), as traders had largely anticipated his stance.
Meanwhile, US President Donald Trump on Monday imposed a sweeping 25% tariff on all steel and aluminum imports into the United States, without exemptions. This follows last week’s decision to impose a 10% import tax on Chinese goods, raising concerns about a potential economic slowdown in China—New Zealand’s key trading partner. Investors are awaiting clearer signals on future trade policies, as escalating trade tensions could weigh on the Kiwi.
Helen Given, FX trader at Monex USA in Washington, highlighted the uncertainty surrounding tariff implementation. “What we’re seeing now is that those headlines and those announcements are not necessarily an indication that these tariffs are actually going to be levied, at least not at the time that we think they might be. So, everyone is just in a wait-and-see mode,” she noted.
With trade tensions and US inflation data in focus, the NZD/USD pair remains sensitive to market shifts in the coming sessions.
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