- The NZD/USD gains ground as the US dollar depreciates after Trump’s new tariff threats.
- President Trump plans to increase import tariffs from 25% to 50% to ensure the American steel industry.
- Karen Silk of the RBNZ said that the rates are now within the neutral range of 2.5% –3.5% after the reduction of rates last week.
The NZD/USD was appreciated at more than 0.50%, quoting around 0.6000 during the Asian hours on Monday. The pair rises while the US dollar (USD) remains weaker in the midst of growing concerns about slow growth and renewed inflation in the United States (USA).
On Friday, President Trump said at a rally in Pennsylvania that he planned to double import tariffs on steel and aluminum to increase pressure on global steel producers and intensify the commercial war. “We are going to impose a 25% increase. We will take it from 25% to 50% – tariffs on steel that enters the United States of America, which will even more ensuring the steel industry in the United States,” he said, according to Reuters.
In addition, the Federal Circuit Court of Circuit in Washington, on Thursday, temporarily allowed President Trump’s tariffs to enter into force. The decision revoked Wednesday issued by a panel of three judges in the International Trade Court in Manhattan who had arrested Trump to impose “Liberation Day” tariffs. The Federal Court found that Trump exceeded his authority by imposing broad import tariffs and declared that the executive orders issued on April 2 were illegal.
The subgovernor of the New Zealand Reserve Bank (RBNZ), Karen Silk, said that interest rates are now within the neutral range of 2.5% –3.5% after reducing the official cash rate (OCR) by 25 basic points last week. Silk also pointed out that the complete effects of past rates reductions must still be felt in the domestic economy. The next policy decision will depend on the data, he added.
New Zealand Faqs dollar
The New Zealand dollar (NZD), also known as Kiwi, is a well -known currency among investors. Its value is largely determined by the health of the neozyous economy and the policy of the country’s central bank. However, there are some peculiarities that can also make the NZD move. The evolution of the Chinese economy tends to move Kiwi because China is the largest commercial partner in New Zealand. The bad news for the Chinese economy is probably translated into less neozyous exports to the country, which will affect the economy and, therefore, its currency. Another factor that moves the NZD is the prices of dairy products, since the dairy industry is the main export of New Zealand. The high prices of dairy products boost export income, contributing positively to the economy and, therefore, to the NZD.
The New Zealand Reserve Bank (RBNZ) aspires to reach and maintain an inflation rate between 1% and 3% in the medium term, with the aim of keeping it near the midpoint of 2%. To do this, the Bank sets an adequate level of interest rates. When inflation is too high, RBNZ rises interest rates to cool the economy, but the measure will also raise bond performance, increasing the attractiveness of investors to invest in the country and thus boosting the NZD. On the contrary, lower interest rates tend to weaken the NZD. The differential type of types, or how they are or is expected to be the types in New Zealand compared to those set by the Federal Reserve of the US, can also play a key role in the NZD/USD movement.
The publication of macroeconomic data in New Zealand is key to evaluating the status of the economy and can influence the valuation of the New Zealand dollar (NZD). A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and can encourage the New Zealand reserve bank to increase interest rates, if this economic strength is accompanied by high inflation. On the contrary, if the economic data is weak, the NZD is likely to depreciate.
The New Zealand dollar (NZD) tends to strengthen during periods of appetite for risk, or when investors perceive that the general market risks are low and are optimistic about growth. This usually translates into more favorable perspectives for raw materials and the so -called “raw material currencies”, such as Kiwi. On the contrary, the NZD tends to weaken in times of turbulence in markets or economic uncertainty, since investors tend to sell the most risky assets and flee the most stable shelters.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
