NZD/USD remains lower, trading below US$0.5700, after the announcement of Trump’s tariff plans
Daily Currency Update
NZD/USD has given back its recent gains, hovering around US$0.5680 during Monday’s European session. The risk-sensitive Kiwi is under pressure as market sentiment turns more cautious, triggered by reports that President Trump’s advisers are advocating for 25% tariffs on Mexico and Canada, set to go into effect on February 1, bypassing negotiations. The US dollar saw safe-haven demand increase off the back of concerns of a potential trade war following President Donald Trump’s suggested 25% tariffs on Colombia, albeit these gains were short-lived. The US Dollar Index (DXY) also recovered from its monthly low of 107.22 on Friday.The NZD/USD pair continues to experience downward pressure off the back of the release of mixed Chinese PMI data. China’s NBS Manufacturing PMI dropped to 49.1 in January, below expectations, while the Non-Manufacturing PMI fell to 50.2. Market observers await the positive material impact of China’s new stimulus of a 53 billion yuan investment program, which has so far not given the Kiwi much traction.
Key Movers
The US Dollar index (DXY) posted moderate losses following concerns regarding AI-related market valuation, and concerns of a potential trade war following President Donald Trump’s suggested 25% tariffs on Colombia. The dollar remains under pressure, largely related to Wednesday’s Federal Reserve decision on interest rates. The euro experienced fresh growth, rising to a yearly high of around US$1.0530. However, these gains were forfeited by the end of the day. Eyes are now on the ECB’s Cipollone and Lagarde’s speeches. The pound failed to hold onto its gains as a momentary push above US$1.2500 saw a retreat to US$ 1.2480. The market now awaits the Bank of Japan’s minutes due to be released on January 29, which will indicate the possibility of further rate tightening.Expected Ranges
- NZD/USD: 0.5675 - 0.5705 ▼
- NZD/EUR: 0.5405 - 0.5455 ▼
- GBP/NZD: 2.1865 - 2.1985 ▲
- NZD/AUD: 0.9035 - 0.9055 ▲
- NZD/CAD: 0.8170 - 0.8195 ▼