NZD/USD holds gains above 0.5950 as PBoC maintains interest rates

• NZD/USD advances as worries over the potential economic fallout in the US continue to weigh on the US Dollar.
• The New Zealand Dollar remains firm after the PBoC held its one- and five-year LPRs at 3.10% and 3.60%, respectively.
• The White House has intensified US-China trade tensions by imposing tariffs on Chinese vessels docking at US ports.

NZD/USD continues its winning streak that began on April 9, trading near 0.5970 during Monday’s Asian session. The New Zealand Dollar (NZD) is buoyed by a weaker US Dollar (USD), which is under pressure due to mounting concerns over the US economic fallout from US tariffs.

The New Zealand Dollar remains stronger following Monday's People's Bank of China’s (PBoC) interest rate decision. The PBoC left its Loan Prime Rates (LPRs) unchanged, keeping the one-year rate at 3.10% and the five-year rate at 3.60%.

Sentiment toward the NZD improved after US President Donald Trump announced exemptions for key tech products, mainly manufactured in China, New Zealand’s largest trading partner, from the proposed “reciprocal” tariffs. Meanwhile, the US Dollar Index (DXY) drops over 0.50%, trading around 98.50, its lowest level since April 2022, at the time of writing.

Despite the exemptions, the White House has imposed tariffs on Chinese ships docking at US ports, threatening to disrupt global shipping routes and further escalate tensions in the US-China trade conflict.

In political developments, reports on Thursday suggested President Trump’s frustration with Federal Reserve (Fed) Chair Jerome Powell, even considering his removal. Although markets showed little immediate reaction, White House economic adviser Kevin Hassett confirmed that Trump is exploring the possibility.