The New Zealand Dollar (NZD) remains under pressure against the U.S. Dollar (USD), with NZD/USD hovering around 0.5610 in early Asian trading on Tuesday. The Kiwi faces selling pressure as trade tensions between the United States and China intensify, raising concerns over economic fallout.
U.S.-China Trade War Weighs on NZD
China’s Commerce Ministry reiterated its opposition to Washington’s latest move to impose an additional 10% tariff on Chinese imports, effective Tuesday. In response, Beijing vowed to take “necessary countermeasures” to protect its economic interests, according to China’s state-backed Global Times.
Given New Zealand’s strong trade ties with China, the rising tensions have negatively impacted the Kiwi, reinforcing its role as a proxy for Chinese economic sentiment.
USD Faces Headwinds from Weak Manufacturing Data
While the NZD remains under pressure, downside movement in NZD/USD may be limited by softer U.S. economic data. On Monday, the ISM Manufacturing PMI for February fell to 50.3 from 50.9, missing market expectations of 50.5. This signals slowing manufacturing activity, which could weigh on the Greenback and prevent a deeper NZD/USD decline.
Key Events to Watch
Later on Tuesday, traders will focus on remarks from Federal Reserve officials Thomas Barkin and John Williams, looking for insights into the central bank’s policy stance. Additionally, market participants will shift attention to Australia’s Q4 Gross Domestic Product (GDP) data, set for release on Wednesday, which could impact broader risk sentiment.
For now, NZD/USD remains vulnerable to trade developments and global economic cues, with 0.5600 as the next key support level.
Related topics:
AUD/USD Outlook: Aussie Dollar Struggles After Weak Inflation Data
AUD/USD Weakens as EUR/JPY and USD/JPY Face Pressure Amid US Tariff Uncertainty
