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NZD/USD slipped slightly to around 0.5705 during Asian trading hours on Monday. The New Zealand dollar (NZD) weakened against the U.S. dollar (USD) as traders prepared for new tariffs to be announced by U.S. President Trump on Wednesday.
Trump plans to announce new “reciprocal” tariffs on Wednesday to address perceived trade imbalances, with the possibility of more duties on Chinese goods. Trump has imposed a 20 percent tariff on all Chinese imports since taking office in January, accusing Beijing of failing to do enough to curb the flow of chemicals used to make the deadly drug fentanyl into the United States. Rising trade tensions between the United States and China could put some selling pressure on the New Zealand dollar, as China is an important trading partner of New Zealand.
Encouraging Chinese economic data could help limit the New Zealand dollar’s losses. Data released by China’s National Bureau of Statistics (NBS) on Monday showed that the manufacturing Purchasing Managers’ Index (PMI) rose to 50.5 in March from 50.2 in February. The reading was in line with market consensus. In addition, the non-manufacturing PMI improved to 50.8 from the previous value of 50.4, better than the expectation of 50.5.
In addition, the Chinese government has pledged to take more fiscal stimulus measures, increase debt issuance and further ease monetary policy. China’s Ministry of Finance will also inject 500 billion yuan (about $69 billion) into the four largest state-owned banks to implement Beijing’s earlier efforts to strengthen the financial sector.
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