New Zealand dollar falls below US$0.56
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Daily Currency Update
The New Zealand dollar is weaker this morning when valued against the Greenback, currently trading at 0.5554 at time of writing. The NZD/USD pair collapsed on Friday, diving below the 0.5600 area as bearish momentum dominated the session. The pair traded deep in the red, shedding over 3% on the day and remaining mid-range between recent extremes at 0.5551 and 0.5798. The fears of an escalation of a trade war between the United States (US) and China exert some selling pressure on the China-proxy Kiwi. The Reserve Bank of New Zealand (RBNZ) is expected to cut the interest rates by 25 basis points (bps) at its April meeting this week. All 31 economists in the March 31-April 3 poll expected the central bank to cut its official cash rate for a fifth consecutive meeting by 25 basis points to 3.50% on Wednesday. The New Zealand central bank has cut rates by a cumulative 175 bps since August last year. Nearly 90% of the economists, 24 of 27, expect another 25-basis-point cut in May. The median forecast indicated an additional 25-basis-point cut in the third quarter, which would bring the interest rate to 3.00% by end-September.Key Movers
The US Dollar Index (DXY), which tracks the performance of the US dollar (USD) against six major currencies, rises on Friday and is trading near the 103 area following a stronger-than-anticipated Nonfarm Payrolls report. The US Non-Farm Payrolls (NFP) report showed a 151K rise in February versus forecasts for a 160K print, while Average Hourly Earnings increased to 4.0% from 3.9% during the same period. A deeper look at the report showed the Unemployment Rate unexpectedly widened to 4.1% from 4.0% in January, even as the Labor Force Participation Rate narrowed to 62.4% from 62.6% during the same period. Fed Chair Powell acknowledged that tariffs could have a stronger-than-anticipated inflationary and economic impact, though policy changes remain on hold for now. He reiterated that inflation is closer to target but still slightly elevated, and the Fed is monitoring uncertainty from federal policies, especially trade. Since Trump’s sweeping global tariffs announcement on Wednesday, some $8.1 trillion has been wiped from share markets around the world.Expected Ranges
- NZD/USD: 0.5450 - 0.5650 ▼
- NZD/EUR: 0.5000 - 0.5200 ▼
- GBP/NZD: 2.2800 - 2.3000 ▲
- NZD/AUD: 1.0600 - 1.0800 ▲
- NZD/CAD: 0.7800 - 0.8000 ▼