NZD/USD TUMBLES BELOW 0.5750 AMID US-CHINA TRADE TENSIONS, RBNZ RATE CUT BETS
NZD/USD TUMBLES BELOW 0.5750 AMID US-CHINA TRADE TENSIONS, RBNZ RATE CUT BETS
The New Zealand Dollar (NZD) has experienced a significant decline against the U.S. Dollar (USD), with the NZD/USD pair falling below the 0.5750 threshold.
This downturn is primarily driven by escalating trade tensions between the U.S. and China, as well as growing expectations of further interest rate cuts by the Reserve Bank of New Zealand (RBNZ).
Former President Donald Trump's announcement of a 10% universal tariff on all imports, with higher rates for key partners like the EU (20%) and Japan (24%), has heightened fears of a global trade war.
This policy has led to a significant sell-off in risk-sensitive currencies like the NZD.
Additionally, Trump's plan to impose a 25% tariff on automobile imports has further exacerbated concerns, especially given China's role as New Zealand's largest trading partner.
Despite recent positive GDP data, economists expect the RBNZ to continue cutting the Official Cash Rate (OCR) in upcoming meetings.
Westpac senior economist Darren Gibbs anticipates 25 basis point cuts in both April and May, which could further weigh on the NZD.
This dovish outlook is influenced by the RBNZ's efforts to support economic growth amidst global trade uncertainties.
