The NZD/USD currency pair rebounded from yesterday’s 60 1/2-month low of 0.5505 on Tuesday, as market players navigated shifting global trade dynamics ahead of the outcome of the RBNZ’s policy meeting on April 9th.
US President Trump has indicated willingness to engage in trade negotiations with major partners, which paved the way for some optimism over a potential easing of trade tensions.
US Treasury Secretary Scott Bessent said nearly 70 countries had reached out to Washington to discuss tariff relief.
However, Trump threatened to impose an additional 50% tariff on goods imported from China, unless Beijing lifts its levies on US imports. Beijing condemned this as “economic bullying” and a “mistake on top of a mistake,” reiterating its commitment to take countermeasures to protect its interests. These developments only added to concerns over a prolonged trade war between the two economic powerhouses.
With China, New Zealand’s largest trading partner, already facing considerable tariffs on almost all goods, New Zealand’s export-oriented economy may also take a severe blow.
Meanwhile, the Reserve Bank of New Zealand is expected to reduce its official cash rate by 25 basis points to 3.5% at its April meeting amid easing inflation, slowing GDP growth and some indications of labor market weakness.
Markets are now pricing in about 100 basis points of interest rate cuts by the Reserve Bank of New Zealand this year.
The NZD/USD currency pair was last up 1.12% on the day to trade at 0.5595.
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