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During the Asian trading session on Monday, NZD/USD fell back to around 0.5895. Expectations that the Reserve Bank of New Zealand (RBNZ) will cut interest rates again in February 2025 and Trump’s tariff threats continue to weigh on the pair. Later on Monday, the U.S. ISM Manufacturing Purchasing Managers Index (PMI) for November will be in focus.
Reserve Bank of New Zealand Governor Adrian Orr hinted at a press conference last week that another double dip could occur in February 2025, citing the backdrop of New Zealand’s economic growth. This in turn dragged the NZD/USD pair lower temporarily. In addition, Trump has pledged to impose 25% tariffs on all products from Mexico and Canada, and an additional 10% tariff on goods from China. Since China is New Zealand’s largest trading partner, tariffs could lead to a global trade war and could have an impact on the New Zealand economy.
Data released by Caixin Insight Group and S&P Global on Monday showed that China’s manufacturing purchasing managers’ index rose to 51.5 in November from 50.3 in October, higher than the estimate of 50.5. However, upbeat economic data failed to boost NZD/USD amid caution.
Traders awaited fresh catalysts from Monday’s U.S. ISM Purchasing Managers’ Index data, which is expected to improve to 47.5 in November from 46.5 in October. Later this week, a Fed spokesman is likely to give some hints on the outlook for U.S. interest rate policy, along with the November U.S. jobs report.
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