NZD/USD gathers strength above 0.6000 as Trump opens to further trade negotiations

• NZD/USD gains ground to near 0.6015 in Tuesday’s early Asian session.

• Trump said he was still open to further negotiation and pushed off increased duties until at least August 1. 

• Financial markets believe the RBNZ will pause its easing cycle on Wednesday after six consecutive rate reductions since August last year.

The NZD/USD pair recovers some lost ground to near 0.6015, snapping the four-day losing streak during the Asian session on Tuesday. The New Zealand Dollar (NZD) edges higher against the Greenback as US President Donald Trump suggested that he was still open to additional negotiations and pushed off increased duties until at least August 1.

Trump announced the first in a wave of promised letters that threaten to impose higher tariff rates on key trading partners. Nonetheless, Trump hinted at the possibility of additional negotiations and delays, saying the August 1 deadline was “not 100% firm” and signaling he remained open to continuing to tweak the rates. Optimism from Trump’s announcement provides some support to the riskier assets like the Kiwi. 

The Reserve Bank of New Zealand (RBNZ) has been in an aggressive rate-cutting stance since it started last August, reducing the Official Cash Rate (OCR) by 225 basis points (bps) from 5.5% to 3.25%, including three 50 bps cuts. The RBNZ interest rate decision will take center stage later on Wednesday. The New Zealand central bank is anticipated to hold OCR unchanged at the July meeting. According to the Reuters poll, the median forecast shows just one more 25 bps reduction this year compared with two in a May survey.