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NZD/USD slipped slightly to around 0.5730 in early Asian trading on Thursday. The New Zealand dollar was pressured by concerns over a global trade war with the United States planning to unveil a series of reciprocal tariffs next week, as well as rising expectations for a rate cut by the Reserve Bank of New Zealand (RBNZ).
Economists expect the RBNZ to cut the official cash rate further at each of its upcoming meetings, despite last week’s unexpectedly positive GDP data. This could weigh on the New Zealand dollar (NZD) relative to the U.S. dollar (USD). “We therefore do not expect this upside surprise [to GDP] to have much impact on the near-term policy outlook, meaning we still expect 25 basis point rate cuts at the April and May meetings,” said Darren Gibbs, senior economist at Westpac.
U.S. President Donald Trump said late Wednesday he would impose a 25% tariff on auto imports, further escalating the global trade war. Trump said the tariffs would take effect on April 2, with the U.S. beginning to collect them the next day. He added that the tariffs would likely be “less stringent” than equivalent tariffs as the April 2 tariff deadline approaches. However, the uncertainty and unpredictability of Trump’s tariff policy has raised concerns about a slowdown in the U.S. economy, which could weaken the dollar.
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