NZD/USD holds positive ground above 0.5750 amid US-China trade war worries
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NZD/USD gains ground to around 0.5770 in Friday’s Asian session.
The Trump administration hit China with new tariffs of 145%.
RBNZ retains considerable room to cut interest rates further.
The NZD/USD pair holds positive ground near 0.5770 after reaching the daily high of 0.5800 during the Asian trading hours on Friday. The uptick of the pair is bolstered by broad US Dollar (USD) weakness amid persistent economic concerns due to escalating tariff tensions.
On Wednesday, Trump reversed course as he announced a 90-day pause on tariffs for all countries except China. Trump said early Thursday that China faced a tariff rate of 145%, clarifying that China also faced a 20% pre-existing levy over fentanyl. Concerns over Trump’s threat of tariffs that have stoked fears of a global recession and trade wars undermine the Greenback and act as a tailwind for the pair.
On the Kiwi front, the Reserve Bank of New Zealand (RBNZ) cut its benchmark interest rate by 25 basis points (bps) at its April meeting on Wednesday amid a steady decline in inflation and weakening domestic economic conditions. Analysts anticipate the RBNZ to deliver a deeper 50 bps cut, with markets factoring in the possibility of up to 100 bps in further easing by 2025. This, in turn, might cap the upside for the New Zealand Dollar (NZD) in the near term.
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